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Century Textiles cement biz set to merge with UltraTech
According to media reports, the process of merger between Aditya Birla group’s UltraTech
and cement business of century textiles is expected to begin in a few months time.
However, the news has not been confirmed by both the companies. There have been on
and off speculation over the years that B.K. Birla group would transfer its cement
businesses to Ultratech. B.K. Birla is the grandfather of Kumara Mangalam Birla, who is
the chairman of Aditya Birla group. B.K. Birla group owns its cement business under three
companies namely Century Textiles, Mangalam Cement and Kesoram Industries. Century
Textiles has 7.8mtpa of capacity located at Chattisgarh (Eastern region), Madhya Pradesh
(Central region) and Maharashtra (Western region). Kesoram has 7.2mtpa of capacity
located entirely in the southern region while Mangalam Cement has 2mtpa of capacity in
the northern region. If the merger takes place it would help Ultra Tech (with domestic
capacity of ~49mtpa) consolidate its position as India’s largest Cement player. The news
of the merger (although unconfirmed) may have positive impact on the prices of Century
Textiles, Mangalam and Kesoram Industries during the day’s trade. Ultratech is current
trading at US$133/tonne based on FY2013E capacity. We remain neutral on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Century Textiles cement biz set to merge with UltraTech
According to media reports, the process of merger between Aditya Birla group’s UltraTech
and cement business of century textiles is expected to begin in a few months time.
However, the news has not been confirmed by both the companies. There have been on
and off speculation over the years that B.K. Birla group would transfer its cement
businesses to Ultratech. B.K. Birla is the grandfather of Kumara Mangalam Birla, who is
the chairman of Aditya Birla group. B.K. Birla group owns its cement business under three
companies namely Century Textiles, Mangalam Cement and Kesoram Industries. Century
Textiles has 7.8mtpa of capacity located at Chattisgarh (Eastern region), Madhya Pradesh
(Central region) and Maharashtra (Western region). Kesoram has 7.2mtpa of capacity
located entirely in the southern region while Mangalam Cement has 2mtpa of capacity in
the northern region. If the merger takes place it would help Ultra Tech (with domestic
capacity of ~49mtpa) consolidate its position as India’s largest Cement player. The news
of the merger (although unconfirmed) may have positive impact on the prices of Century
Textiles, Mangalam and Kesoram Industries during the day’s trade. Ultratech is current
trading at US$133/tonne based on FY2013E capacity. We remain neutral on the stock.
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