The Hindu Business Line : Skanska Cementation springs a surprise

THE Skanska Cementation India stock, which after change in overseas parent was thought to be out and over on the domestic market after an open offer in January this year, is not only alive but kicking too.

The stock today built and finished at a new 52-week high of Rs 426.90 and made a gain of around five per cent.

The open offer for 19.63 per cent residual public holding by Italian-Thai Development Public Company Ltd, the new overseas acquirer of Skanska Cementation, had attracted very limited response as the price of the stock on the bourses ruled much above the offer price of Rs 209 (plus a 10 per cent interest component on it) during the offer period between January 6 and January 25.

According to Mr Rajesh Agarwal of CD Equisearch, after the offer closed the price began to rise steadily on scant volumes on lack of supply.

According to him, developments like proposal to open up the construction sector for FDI have prompted the existing shareholders to stay invested.

Mr Deepak Jain of Anagram Stockbroking said that under the SEBI norms, either the new acquirer has to come out with a higher offer or reduce holding to less than 75 per cent from the current 80.37 per cent.

The construction company has a number of strategic business divisions for marine projects, industrial and bridge projects and specialised engineering projects.

The company had obtained several orders for highway projects in Tamil Nadu and Maharashtra.

Skanska Cementation reported a substantial loss of Rs 41.52 crore for the year ended December 31, 2004 against profit of Rs 3.89 crore in the previous year.

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