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ACC share crumbles in open offer backlash

Mumbai, March 19: ACC drew fire on bourses today, pounded by investors disappointed that Gujarat Ambuja was let off without having to make an open offer.

The Securities and Exchange Board of India (Sebi) ruled on Monday that Gujarat Ambuja Cements did not exercise management control when it bought a 14 per cent stake in ACC. The scrip opened at Rs 139, slipped to its intra-day low of Rs 132.10 and finished at Rs 132.65, a decline of Rs 6.70, or 4.80 per cent over its previous close.

Market watchers said the sharp fall in the ACC share mirrored the dismay among investors wanting to pocket good gains by selling their shares to Gujarat Ambuja. “Since this did not happen, the stock was dumped by operators,” a dealer working for a local brokerage said.

Even as ACC hit the skids, the Gujarat Ambuja share firmed up after uncertainty over the public offer cleared away. The stock hit an intra-day high of Rs 157 after opening at Rs 154.50. The scrip closed off these highs at Rs 155.60, a gain of Rs 2.85 over Monday’s close.

Reports that fresh capacity additions could depress cement prices also weighed down the ACC share, brokers said. New capacity of close to 3.5 million tonnes will be added, mainly in the southern and western regions.

The Sebi ruling freed GACL from making an open offer, which would have cost it more than Rs 1,000 crore.

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