The Hindu Business Line : Zooms on merger talk

According to the market grapevine, with Hindalco's views on restructuring and the fact that it already has a majority holding in the company, a merger would be opportune. Bihar Caustic is the main supplier of caustic soda to Hindalco.

As of March 31, 2004, Hindalco holds 51.26 per cent stake in the company with Birla companies Pilani Investment and Industries and Renuka Investment and Finance holding 1.67 per cent and 3.31 per cent stake, respectively. The stock ended the day at Rs 20.50 up 4.6 per cent with around 6008 shares traded on the BSE.

Merger buzz pep

Reports that private equity funds are looking to tie-up with larger companies to pick up a stake in smaller cement players strengthened the perception of consolidation within the cement industry.

However, dealers said that mergers and acquisitions interest has always been there in this segment and one cannot really say when it will translate into action.

Analysts maintain that expectations of a good monsoon backed by strong infrastructure and housing sector growth have infused an optimistic outlook on the cement sector.

The four cement majors on Tuesday also announced their production and despatch numbers for May. Frontline and second tier stocks rallied, to end the day firm on the bourses. The stocks of ACC, GACL, Grasim, Birla Corporation, India Cements to name a few, ended the day significantly higher.

Pointers to demand

A block deal of five lakh shares at the counter of Padmalaya Telefilms at Rs 41.35 signalled that interest in media stocks is running strong.

ICICI Bank is reported to have been the seller. The stock ended the day at Rs 53.10 up 3.21 per cent with around 5.52 lakh shares traded on the BSE. On the NSE, the stock ended at Rs 53.10 up 2.71 per cent with around 1.8 lakh shares traded.

Dealers said that media stocks, which have been battered in the recent past, are witnessing a revival in interest due to several reasons. Apart from speculation that Reliance Mutual Fund is actively mopping up media shares, the build up is also attributed to the fact that the near future is likely to see several media companies (Sony and Star TV) access the capital market for funds. Additionally, there is a perception that accumulation is also being driven purely by valuations.

Deeptha Rajkumar

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