Major share of this cement manufacturing company is going to be sold, investors rushed to buy shares as soon as they got wind of it

Cement stock: Hyderabad-based cement manufacturing company Sagar Cement Limited on Monday (March 16) announced the sale of its stake in its subsidiary company Andhra Cements Limited. The company is selling its total stake of 7.24 percent (about 66.76 lakh equity shares) through Offer-for-Sale (OFS). This deal will be done at the floor price of Rs 52 per share.

Why is the stake being sold?

The company’s board took this decision to follow the minimum public shareholding (MPS) guidelines of market regulator SEBI. According to stock market rules, the share of owners or promoters in a company should not exceed 75 percent so that the remaining 25 percent shares remain with the public. Since Sagar Cements (promoter) holds 90 percent shares of Andhra Cements. That means this fixed limit is more than 75 percent.

To bridge this 15 percent gap, Sagar Cements is selling its stake in the company so that as per the rules, its stake in the company comes down to 75 percent and the stake of the remaining common investors increases to 25 percent. With this, buying and selling of shares can be done properly in the market. Under this offer-for-sale, non-retail investors will get a chance to bid on March 17, while retail investors will be able to bid on March 18.

rise in shares

After this news, there is a tremendous rise in the shares of Andhra Cement Limited today. The company’s shares jumped almost 10 percent to reach an intra-day high of Rs 56. OFS window to sell 7.24% stake in the company is open from today. The floor price for this has been fixed at Rs 52. Since the opening of the stock was above this, the buying increased further. Today is a safe day for non-retail investors (mutual funds and banks) and due to huge demand from them, shares are seeing a rise.

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