Moneycontrol Pro Panorama | Ambuja Cements’ homecoming

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When Narottam Sekhsaria, the principal founder of Ambuja Cements, decided to sell the company’s stake in ACC in 2005, he chose Holcim over Lafarge. He found the Swiss to be less aggressive and more reasonable, Sekhsaria wrote in his autobiography 'The Ambuja Story'.

Eventually Sekhsaria along with his co-promoters sold their stake in Ambuja Cements to Holcim, catapulting the Swiss multinational group into the top cement producers in India. Sekhsaria committed to remain chairman till the age of 75.

The arrangement may change now with Holcim deciding to exit India. Several Indian business groups are vying to purchase Holcim’s Indian subsidiaries and one of them is expected to emerge as the new promoter of Ambuja Cements. JSW Group is preparing to make a $7 billion bid, according to a Financial Times report.

As industry observers explain, the cement business holds good promise in India, given the vast housing and infrastructure needs. Ambuja Cements and ACC have established brands in India.

Ambuja Cements has grown well and created immense shareholder wealth under the original founders. But the company did not maintain its expansion momentum under Holcim. Hopefully, a new promoter will bring more growth focus into Ambuja Cements and ACC. This will be important for minority shareholders returns.

“While it is not incorrect that cement majors in the past decade have grown at the expense of ACC and Ambuja, the latter have turned fairly aggressive in the past 2 years, in our view,” analysts at Jefferies India said in a note.

Meanwhile, equity markets are trading mixed amid weak global cues. Overnight stock markets in the US slid on persistent high inflation and fears of economic slowdown. The weak sentiment has led to subdued listing of Rainbow Children's Medicare. The initial public offering of the Life Insurance Corporation of India received decent response and the public issue of Prudent Corporate Advisory Services opens today.

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Technical picks: Gold mini, Infosys, TCS, Infosys and Infosys (These are published every trading day before markets open and can be read on the app)

R Sree Ram Moneycontrol Pro