Shares of Sanghi Industries continued to dwindle in Wednesday's trade after Adani Group-owned Ambuja Cements announced a merger of its subsidiaries. The stock tumbled 12.35 per cent to hit a 52-week low of Rs 67.42. It saw high trading volume on BSE as around 3.37 lakh shares were last seen changing hands today. The figure was higher than the two-week average volume of 30,000 shares.
Turnover on the counter came at Rs 2.32 crore, commanding a market capitalisation (m-cap) of Rs 1,783.74 crore. There were 6,52,637 buy orders as against sell orders of 1,16,465 shares.
The merger of Sanghi Industries and Penna Cement Industries into Ambuja aims to streamline operations and solidify its market position. Under the proposed scheme with Sanghi Industries, shareholders will receive 12 Ambuja Cements shares for every 100 Sanghi shares held. Ambuja, already the promoter with a 58.08 per cent stake in Sanghi, seeks to fully integrate the business to drive efficiency and growth.
In the case of Penna Cement, Ambuja Cements entered into a binding agreement to acquire 100 per cent stake in Penna at an estimated value of Rs 10,420 crore. Now, Ambuja Cements has proposed to amalgamate it.
For Adani Cementation, Ambuja Cements would issue 174 shares for every 1 share of Adani Cementation, subject to necessary statutory and regulatory approvals under the applicable laws, including NCLT.
"This transaction will lead to Ambuja issuing 87 lakh shares to Adani Cementation shareholders, this will dilute Ambuja promoters' stake by another 0.24 per cent," it said.
As per BSE, Sanghi's stock has a negative price-to-equity (P/E) ratio of 3.93 against a price-to-book (P/B) value of 2.41. Earnings per share (EPS) stood at (-)19.55 with a return on equity (RoE) of (-)61.27.
Separately, foreign brokerage Investec said it finds comfort in the Ambuja management reaffirming its growth goals, cost and synergy targets and on-going initiatives to achieve the same.
"We understand aforesaid transaction will require majority of minority approvals and await clarity on potential tax benefits with respect to carryforward accumulated losses and unabsorbed depreciation," Investec stated. The broking firm suggested a target price of Rs 950 on Ambuja Cements.