Prism Cement to consolidate with group firms

The Rajan Raheja group is planning a consolidation of its flagship company, Prism Cement, with its tiles manufacturing and readymix concrete businesses. The board of the cement company is meeting on Saturday to decide the scheme of arrangement with the group firms, H&R Johnson and RMC Readymix , said a company executive.

“The consolidation will help the company in raising funds as it plans to add capacities,” said an industry analyst.

Prism Cement has a 2.5 million tonne per annum (mtpa) unit in Madhya Pradesh’s Satna district. The company plans to add another 3.6 mtpa plant in Satna. And another in Andhra Pradesh with a capacity of 4.8 mtpa.

“Tiles and readymix and cement are all related with construction businesses , so we have decided to consolidate them,” said the executive, who did not wish to be named. Prism Cement, currently, does not hold any stake in these two firms and the consolidation is expected to benefit the shareholders.

The company’s stock was one the highest gainers on the exchanges today, with the shares rising 15.1 per cent to Rs 53.5 on the Bombay Stock Exchange (BSE). Nearly 30 million shares of the company were traded on BSE and the National Stock Exchange, taking the price to a one-year high.

The proposed amalgamation is in contrast with what the country’s second largest cement maker, ACC, did in 2008 by spinning off its ready concrete business into a separate company, ACC Concrete.

Prism Cement reported net sales of Rs 630 crore during 2008-09 and recorded a net profit of Rs 90 crore.