Dalmia Cement (Bharat) Limited (DCBL), on Saturday, announced that it had increased its stake in OCL India from current 21.7 per cent to 45.4 per cent through an inter-se transfer.
The acquisition was completed in an all-cash deal at the ruling market price. Dalmia Cement, with this expansion of foot print in the eastern region, has now become a two-region player.
OCL India is a diversified company with interests in cement and refractory business. It has a very strong presence in the eastern region of the country. Commenting on the development Mr. Puneet Dalmia, Managing Director, DCBL said, “As a first step towards becoming a pan-India player, we have extended our cement footprints from southern region to east India. We now have an access to the high growth eastern market. With this strategic investment, our profitability is likely to improve further,” a release quoted Puneet Dalmia, Managing Director of DCBL, as saying.
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The acquisition cost of OCL stake at $50 per tonne is much below the replacement cost for a cement plant. The acquisition is at the enterprise value of OCL without assigning any value to its refractory business.
The present cement of capacity of Dalmia Cement is 9 million tonnes and OCL India 5.3 million tonnes.
DCBL, with total gross income of around Rs. 2,500 crore, has business interests in two major segments, cement and sugar. It has cement plants in southern States of Tamil Nadu (Dalmiapuram & Ariyalur) and Andhra Pradesh (Kadapa) with a combined capacity of nine million tonnes per annum.
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The company has three integrated sugar mills in Uttar Pradesh with a total installed capacity to crush 22,500 tonnes of cane per day.