Moneycontrol Bureau
Investors lapped up shares of Aditya Birla Chemicals India (ABCIL) on Tuesday after the company decided to buy chlor-alkali division (CAD) of Jayshree Chemicals. The stock gained as much as 7.5 percent intraday to touch a record high of Rs 313 on the Bombay Stock Exchange while Jayshree Chemicals is locked at 5 percent upper circuit at Rs 15.30.
"The board of directors of ABCIL on Monday approved the acquisition of the CAD division of Jayshree Chemicals for a cash consideration of Rs 212 crore. This transaction takes ABCIL to a higher growth trajectory," said the company in its filing.
With this acquisition, the total caustic soda capacity of ABCIL will increase to about 3,55,000 tons per annum. Caustic soda is one of the essential inputs for the manufacture of alumina.
CAD’s manufacturing facility is strategically situated in the state of Odisha and is in proximity to various aluminium manufacturing facilities, which provides significant growth opportunities. The facility also has about 1600 acres of salt works in Andhra Pradesh. The current capacity of the facility is about 57,000 tons per annum.
"We expect significant operational synergies on account of cost savings. The acquisition cost and proposed capital expenditure will be funded through a mix of internal accruals and debt," said Lalit Naik, sector head for chemicals, Aditya Birla Group.
At 11:17 hours IST, the stock was quoting at Rs 306.10, up Rs 15.05, or 5.17 percent on the BSE.
Posted by Sunil Shankar Matkar
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