The Hindu Business Line : Actis set to pick up stake in Dalmia Cements

M&A action
The cement sector has been seeing much M&A action over the last couple of years, as growth in the sector is being fuelled by increased infrastructure development projects and the real estate boom.

New Delhi , March 12

Private equity investor Actis is set to pick up stake in cement manufacturer Dalmia Cements (Bharat) Ltd at an investment of about $25 million.

According to sources, the UK-based equity firm will pick up about 11 per cent stake in the company, which had a turnover of Rs 519 crore in the last fiscal year.

Actis has raised funds of approximately $500 million for investments in the Indian market and its past/current investments in India include Punjab Tractors, UTI Bank and Glenmark. This is the equity firm's first investment in the cement sector in India. The cement sector has been seeing much M&A action over the last couple of years, as growth in the sector is being fuelled by increased infrastructure development projects and the real estate boom.

The beginning of the year has already seen one of the largest deals being struck in the sector, with Swiss cement major Holcim buying controlling stake in Gujarat Ambuja. Late 2005 also saw two significant deals in the sector. Hong Kong-based Asia Debt Management made an investment of $57 million in India Cements while Prudential ICICI and DSP Merrill Lynch together acquired a 7.4 per cent stake in Orissa-based cement manufacturer, OCL India.

Indian cement companies have been ramping up capacity to meet increased demand. In fact, data shows that cement production in India has recorded a CAGR of 8.2 per cent between 1994 and 2003, while the world average is 3.5 per cent.

Analysts point out that the future for the cement sector looks bright. In fact the Indian cement industry is expected to cross 150 million tonnes in dispatches, including domestic consumption and exports, during 2005-06 with a large percentage of sales coming from the South where Dalmia Cement's facility is located.

More Stories on : Cement | Mergers & Acquisitions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Investment banks hardsell India equity story to global clients

Performance is what matters most

Anil Ambani recasts telecom

Actis set to pick up stake in Dalmia Cements

PM calls meeting on Rangarajan panel report

Import duty on steel scrap impacts housing sector

Earn-outs are the in-thing in M&A deals

Smooth ride may continue