Cement stocks gain after COMPAT quashes CCI penalty

Eight cement stocks rose 0.48% to 2.1% at 09:55 IST on BSE after the Competition Appellate Tribunal quashed the penalty imposed on 11 cement firms by the Competition Commission of India on charges of cartelisation and other unfair trade practices.

Meanwhile, the BSE Sensex was down 42.26 points, or 0.17%, to 25,002.17

Ambuja Cements (up 1.54%), ACC (up 0.84%), UltraTech Cement (up 1.71%), Shree Cement (up 1.5%), India Cements (up 2.1%), JK Cement (up 0.48%) and Century Textiles Industries (up 0.72%) gained.

Grasim Industries was up 0.82% at Rs 3,655. Grasim has exposure to the cement sector through its holding in UltraTech Cement.

Madras Cements (down 0.3%) and Jaiprakash Associates (down 1.21%) fell.

The Competition Appellate Tribunal (COMPAT) on Friday, 11 December 2015, quashed the penalty of Rs 6316 crore imposed on 11 cement firms by the Competition Commission of India (CCI) on charges of cartelisation and other unfair trade practices. COMPAT also directed the CCI to refund the 10% of the penalty amount the companies had to deposit with the fair trade regulator. The judgement follows appeals filed by the cement firms and the industry body Cement Manufacturers Association.

The companies included ACC, Ambuja Cements, Binani Cements, Century Textiles Industries, India Cements, JK Cements, Lafarge India, Madras Cements, UltraTech Cement and Jaiprakash Associates. The commission had passed the order after an investigation into complaints from the Builders Association of India against alleged price cartelisation among cement firms.

As per the penalty imposed earlier, ACC will be refunded Rs 114.75 crore, Ambuja Cements Rs 116.39 crore and UltraTech Cement will be refunded Rs 117.54 crore. Meanwhile, the tribunal has directed CCI to hear the case again and pass a fresh order within three months.

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