Kesoram Industries Shares Rally on Strategic Business Developments

Kesoram Industries Shares Rally on Strategic Business Developments

VoM News Desk | November 28, 2023 | 02:27 PM IST | Breaking News | Follow on Google News

Kesoram Industries Shares Rally on Strategic Business Developments

Kesoram Industries Shares Rally on Strategic Business Developments

Kesoram Industries Ltd witnessed a 5% increase in its share price during Tuesday’s intraday trade. This surge is linked to the company’s announcement of an upcoming board meeting on Thursday, November 30. The key agenda of this meeting includes withdrawing the proposed scheme of arrangement with its subsidiary, Cygnet Industries, and exploring options for the repayment or retirement of its existing Non-Convertible Debentures (NCDs).

Withdrawal of the Scheme of Arrangement

The proposed scheme of arrangement, announced on May 22, involved separating the rayon business from the cement business. This scheme, however, is now set to be withdrawn, as indicated in the company’s exchange filing on November 27. Kesoram Industries, a significant player in the Indian business landscape, had moved its rayon business to Cygnet Industries Limited, a wholly-owned subsidiary, in 2016.

Interest from Major Cement Players

The shares of Kesoram Industries have been in the spotlight since last Thursday, following reports by CNBC-TV18 that UltraTech Cement Ltd showed interest in purchasing the cement assets of Kesoram Industries. UltraTech is currently conducting due diligence at Kesoram Industries and is weighing options, including either acquiring the promoters’ stake in Kesoram or purchasing its cement division.

Adani Cements Also Eyeing Kesoram’s Assets

Adani Cements, part of the Adani Group and the holding company for Ambuja Cements and ACC, is also reportedly considering a bid for Kesoram Industries’ cement assets. This move is part of Adani Group’s strategy to more than double its total production capacity to 140 million tonnes per annum (MTPA) by FY28. Bankers close to the development have indicated that the Adani Group is interested in aggressively increasing their production capacities.

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Technical Outlook and Recent Developments

On the technical front, Kesoram Industries’ share price opened at ₹126.19 on the BSE. The stock recently hit a 52-week high, closing at ₹120.19 last Friday. According to Ruchit Jain, Lead Research Analyst at 5paisa, the broader trend for Kesoram Industries is positive, with the recent price increase supported by strong volumes. The stock’s support levels are now placed around ₹118 and ₹110. In a related development, Ambuja Cements, an Adani Group flagship company, announced the acquisition of Sanghi Industries Ltd (SIL) at an enterprise value of ₹5,000 crore earlier in August.

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VoM News Desk

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