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Cement scrips gain in vigour

Mumbai, Nov. 5: Cement counters saw hectic activity on the stock markets today with two star performers—Larsen and Toubro and ACC—notching up handsome gains.

While the L&T scrip rose on rumours that the AV Birla group may have to revise its open offer price, ACC gained on hopes of Sebi directing Gujarat Ambuja to make an open offer at the same price it acquired shares from the Tatas.

The sentiment was so strong at the L&T counter that shares of the country’s second largest cement maker today surged past Rs 190, the price that Grasim Ltd had offered L&T shareholders.

Incidentally, the last date for making a counter-offer ended on Monday. While the Birlas may have heaved a sigh of relief as the spectre of another suitor for L&T has now virtually disappeared, what remains to be seen is whether the open offer will meet with any success at all at the current price.

“It is, however, to be seen whether they raise the open offer price, as it is unrealistic to expect shareholders to accept an offer price which is lower than the market price,” a merchant banking source said.

Talks on the open offer price being raised to Rs 220 is making the rounds. Further, news that cement deliveries in October rose 22 per cent over last year and production increased 19.2 per cent also boosted sentiments at the counter.

For the first time since the open offer price, the L&T share closed higher at Rs 193.10 after touching an intra-day high of Rs 194.40 as against Monday’s close of Rs 189.95, a rise of Rs 3.15. Incidentally, the Grasim share price fell by Rs 2.75 to Rs 310.10 from Rs 312.85 on Monday.

L&T, a well diversified conglomerate with interests in engineering and construction, said cement deliveries for the month of October stood at 8.9 lakh tonnes, up from 7.3 lakh tonnes a year ago—a 22 per cent jump.

The company’s all-round growth was apparent also in its production which moved up 19.2 per cent in October to 9.9 lakh tonnes from 8.3 lakh tonnes last October. More than 2.48 lakh shares were traded at the counter.

ACC, which rose sharply today, closed at Rs 142.75 from its overnight close of Rs 139.15.

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