The JK Cement share price rose in the early trade on July 7 after the company's arm increased its stake in paint and construction chemicals manufacturer Acro Paints.
JK Maxx Paints (JKMPL), earlier JK Paints and Coatings), a wholly owned subsidiary of JK Cement, has in second tranche invested Rs 60.24 crore towards the acquisition of 20 percent equity shares of Acro Paints (APL).
Consequent upon the present acquisition, JKMPL has acquired a total 80 percent equity share capital of APL with immediate effect, the company said in an exchange filing.
The said acquisition would get completed in a year from January 6, 2023.
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In December 2022, JK Paints and Coatings entered into a share purchase agreement with Acro Paints and its shareholders to acquire a 60 percent controlling stake in the company for Rs 153 crore in the first tranche.
Acro Paints is a leading manufacturer in northern India of architectural and high-performance paints and coatings.
The company decided to acquire the remaining 40 percent stake over a period of 12 months.
JK Cement is a north India-based cement manufacturing company with 65% of installed capacity, adding 8-9mtpa in demand rich the central region will give competition to the peers in the region. Also, getting into the paint business will have synergy benefits from its white cement and wall putty business, especially in marketing and sales point, said Girija Shankar Ray of SMIFS Institutional Research.
At present, company's white cement and wall putty installed capacity is 2.81MTPA (vs. 2mtpa UltraTech) with total 95K dealers & retailers combining grey cement + white cement + wall putty business, she added.
At 9.22 am, JK Cement was quoting at Rs 3,317.05, up Rs 25.10, or 0.76 percent on the BSE.
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