ITD Cementation shares fall 8% post Adani’s acquisition bid

Shares of ITD Cementation declined nearly 8% in early trade on Monday after an Adani Group firm signed a deal to acquire a majority stake in the engineering and construction company. The deal with billionaire Gautam Adani-led power-to-cement conglomerate seemed to have failed to lift the mood as the stock has been under stress for three sessions and lost over 10% during this period.

Continuing its losing streak, ITD Cementation shares dropped as much as 7.7% to ₹491.55 in the first hour trade on the BSE. Early today, the smallcap stock opened 2.3% higher at ₹545 against Friday’s closing price of ₹532.80 on the BSE. However, the stock failed to hold early gains and tumbled as much as 10% from day’s high level.

At the time of reporting, shares of ITD Cementation were trading 2.8% lower at ₹517.90, with a market capitalisation of ₹8,897 crore.  

The counter touched its 52-week high of ₹694.45 on October 4, 2024, and a 52-week low of ₹193.15 on October 27, 2023. In the last one year, the stock has risen over 150%, while it added nearly 80% in the calendar year 2024. The smallcap share has gained 36% in six months, while it lost nearly 2% in a month.

Despite the recent correction, ITD Cementation shares trade higher than the 200-day moving average. However, it is lower than the 5-day, 20-day, 50-day, and 100-day moving averages, as per data compiled by MarketsMojo, a stock market research platform.

In an exchange filing on October 26, the Mumbai-headquartered firm said that Adani Group signed a deal to acquire a controlling stake in ITD Cementation India from its Thailand-based promoter, Italian-Thai Development Public Company Ltd (ITD). The conglomerate’s unit Renew Exim DMCC proposes to buy a majority stake in the engineering and construction, including the primary transaction and open offer, for a total consideration of over ₹5700 crore.

As part of the deal, ITD Cementation’s Thai promoter to sell a 46.64% stake in the company to Renew Exim DMCC for ₹3,204 crore. Renew Exim has also made an open offer to acquire an additional 26% shares in the company from public shareholders for ₹2,553 crore.

The floor price for the primary deal was ₹400 per share, a discount of 25.8% over the ITD Cementation stock’s last closing price of ₹539. On the other hand, the open offer has been made at ₹571.68 per share, a premium of 6% over the last trading price.

Post-primary deal and open offer, Adani Group’s shareholding in ITD Cementation would be 72.64%, assuming that the open offer gets fully subscribed.

The acquisition is likely to boost Adani’s civil engineering capabilities as it is looking for expansion in sectors such as airports, highways, and metro projects.

ITD Cementation established its operations in India in 1931 as a branch of The Cementation Company Ltd, U.K., a member of Trafalgar House Group of London, for carrying out extensive grouting and drilling works to the hydraulic structures which were then growing at rapid pace. Over the years, the company has emerged as an engineering and construction firm undertaking heavy civil, infrastructure and EPC business. In 2004, Italian-Thai Development Public Company entered into a share purchase to acquire a stake in the company.

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