Larsen and Toubro (L&T) has offloaded its entire 11.49 per cent stake in UltraTech Cement for about Rs 1,037 crore and the fund will be used for the capital expenditure and investment in new initiatives.
L&T has sold over 14.3 million shares at an average price of Rs 725 a share. The shares were sold to 25 financial institutions, including 13 overseas and 12 domestic, in two blocks of 13.7 million shares and 630,289 shares on the National Stock Exchange (NSE). Citigroup was the sole book-runner to the deal.
“L&T will use the funds to partly finance its new initiatives such as ship building, nuclear forgings, boiler and turbine manufacturing and projects in the defense sector,” chief financial officer YM Deosthalee told Business Standard. The company has around Rs 2,000 crore investment plans in this financial year.
“L&T got a fair price through the sale because our investment in UltraTech was very low. In our books of account, it is at Rs 14 crore,” said Deosthalee.
Meanwhile, shares of UltraTech Cement reacted negatively to the development and plunged over seven per cent in the morning trade on the BSE. The scrip dipped to a low of Rs 708, down 7.23 per cent over previous close. In the afternoon trade, the recovered half of its loss and closed at Rs 735.20, down by 3.66 per cent.
Besides, shares of L&T remained volatile in the early trade. After opening firm on the bourses, it slipped 2.79 per cent to witness a low of Rs 1,586.50. The scrip closed 0.55 per cent down at Rs 1,624.70 on BSE.
Aditya Birla group flagship firm Grasim Industries holds 50.70 per cent stake in UltraTech. Including this, the promoters hold 54.78 per cent in UltraTech. UltraTech shares have almost doubled in value in 2009 while Larsen shares have more than doubled, compared with a 60 per cent rise in the Sensex.
Citigroup Global Markets Mauritius, LIC, Pru India Equity Open, Reliance Capital Trustee and MasterTrust Bank are some of the entities which bought the stake from L&T in block deals today.
Source: Business-Standard