Balrampur Chini to surge if Bajaj Hindusthan buys its stake

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Balrampur Chini to surge if Bajaj Hindusthan buys its stake

The promoters of Balrampur Chini may sell their stake in the company and sources say India’s largest sugar company Bajaj Hindustan may buy the stake. CNBC-TV18's Managing Editor Udayan Mukherjee's comments on the development.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Bajaj Hindustan may take over Balrampur Chini: Sources ALSO READ See what other CNBC-TV18 anchors have to say Balrampur Chini BSE | NSE 30/05/12 Are Mutual Funds betting on Balrampur Chini? Other Stocks in this news Bajaj Hindusthan |

The promoters of Balrampur Chini may sell their stake in the company and sources say India's largest sugar company Bajaj Hindustan may buy the stake. CNBC-TV18's Managing Editor Udayan Mukherjee's comments on the development. 

Below is a verbatim transcript of Udayan Mukherjee's comments on CNBC-TV18. Also watch the accompanying video.

Q: What about the news in Balrampur Chini and Bajaj Hindusthan ?
A: It is interesting news and has been brewing in the market for three months. We asked Vivek Saraogi a couple of months back whether he was selling and he laughed it off. But when rumours tend to persist in the market then sometimes there is fire behind the smoke. It is perfectly plausible that this kind of a deal will happen.

Maybe the Saraogi's want to exit at a reasonable peak in the up cycle for sugar and sugar is on a up cycle now, at all time high prices, etc. The results are very robust and will continue to be and in this kind of an up cycle they may well take the call that they don't want to be in the business while the going is good they might as well sell their stake to another company if indeed that is what they wanted to do.

People will definitely be interested in Balarampur Chini because it is one of the priced jewels in the sugar space. It has efficient operations, large operations and good power capacity as well. I think it's a plump piece in the sugar space in India and it's very conceivable from the names that we are flashing that they would all be interested.

Q: Could Bajaj Hindusthan pick it up?

A: It might try to because they are in UP, it's very complementary. They would have to pay top dollar for it and they probably would have to pay a premium to the current market price as well, the street is buzzing Rs 180-185.

Q: Would Rs 2,000 crore of spending strain their already stretched balance sheet?

A: They were just beginning to clean it up a bit but these opportunities don't come everyday. So I am sure they would want to take that extra Rs 2,000 crore on even if they have a chance to bag his asset.

Q: How should the market read it?