Sebi Scrutiny Pulls Grasim Down 7.88%

Shares of cement and viscose staple fibre (VSF) major Grasim Industries plunged today on the Bombay Stock Exchange (BSE) on the news that the Securities and Exchange Board of India (Sebi) is seeking details of its acquisition of the Ambanis' 10 per cent stake in Larsen & Toubro (L&T).

The stock plummeted 7.88 per cent to Rs 256.55 on BSE, off its day's high of Rs 280. About 1.83 lakh shares changed hands.

The markets were concerned whether Grasim would be required to come out with an open offer, cement analysts said.

On November 18, Grasim had bought Ambanis' 10 per cent stake in L&T at a price of Rs 306.60, which was at a huge 47 per cent premium to the then prevailing price of Rs 208.50.

The acquisition, on expectations that it would boost the pricing power of the Grasim-L&T and ACC-Gujarat Ambuja Cements combine, along with a rise in post-monsoon cement dispatches had boosted most cement counters.

In less than a month, the Grasim scrip surged 13.5 per cent to a high of Rs 324.60 on December 10 from Rs 285.90 on November 15.

However, the gains were given away in the next few trading sessions and the scrip fell to Rs 278.50 yesterday. The volumes on the counter have fluctuated between less than a lakh shares a day to a high of 6.98 lakh shares on November 19.

The market watchdog has sought details of the deal after the complaint from the Investors' Grievances Forum (IGF) that the deal constituted a "backdoor takeover" and small investors were to lose. Sebi seeks to know if there has been any change in the management control of L&T since the acquisition. The companies are required to furnish the details by January 4.