The Hindu Business Line : ACC posts huge volume

RUMOURS that the 1.62-crore shares of Associated Cement Companies (ACC) held by the Harshad Mehta group entities are up for grabs, saw the company's stock register huge volumes on Monday.

While the market is no stranger to this rumour, this time round reports of the special court-appointed custodian having asked prospective bidders to file their offers for a controlling block of shares on or before October 8, lent an element of credibility, which was reflected in the stock price.

Fuelled by this report, the market grapevine was abuzz with talk of the probable bidders for the stake, which constitutes about 10 per cent of the cement majors equity. Opinions remained divided over whom — Grasim or Gujarat Ambuja — would be the more interested or beneficial party.

"It is very unlikely that GACL would bid for this stake as it would mean that they would have to make an open offer. There is talk that Grasim is an interested party. However, what could prove to be the real trigger for this counter would be if international players, like Lafarge or Holcim, come forward to bid," Mr Srikanth Shetty of Karvy Stock Broking said. Technical analysts are of the view that in the wake of such reports, the henceforth the downside at this counter is restricted. "One is unlikely to see investors offloading this stock from now on. There is every possibility that in the short term the counter could easily see an upside of up to Rs 220-230, i.e. if it does not take a hit this Thursday, the last day of derivatives trading," a technical analyst commented.

However, Mr Kaushal Shah of LKP Securities is of the view that amongst the two heavyweights - Grasim and GACL - the former is unlikely to be interested in making a bid for the stake. "With L&T already in their fold, why would Grasim be interested in picking up a stake in a company which would at most give them two board seats. Also given ACC's professional management, there would not be much room for manoeuvring," he said.

On the other hand, despite the oft-repeated statements by GACL indicating their disinterest in raising their stake in ACC, Mr Shah is of the view that post the Grasim-L&T combine, GACL could take a bet.

The stock ended the day at Rs 189.30 up 2.74 per cent with around 21.84 lakh shares traded on the BSE. On the NSE, the stock closed at Rs 189.40 up 3.24 per cent with around 481.15 lakh shares traded.

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