RInfra gains after completing sale of cement subsidiary

Reliance Infrastructure gained 2.5% to Rs 605.15 at 12:35 IST on BSE after the company announced the successful completion of sale of its 100% shareholding in Reliance Cement Company to Birla Corporation.

The announcement was made after market hours yesterday, 22 August 2016. Shares of Birla Corporation dropped 2.99% to Rs 660.60.

Meanwhile, the S&P BSE Sensex, was down 34.60 points or 0.12% at 27,950.94.

On BSE, so far 2.73 lakh shares were traded in the counter of Reliance Infrastructure, compared with an average daily volume of 4.14 lakh shares in the past one quarter. The stock hit a high of Rs 609.20 and low of Rs 595 so far during the trading session. The stock had hit 52-week high of Rs 622.05 on 5 January 2016. The stock had hit 52-week low of Rs 282.20 on 25 August 2015. The stock had outperformed the market over the past one month till 22 August 2016, gaining 5.19% compared with the Sensex's 0.66% rise. The scrip had also outperformed the market in past one quarter, rising 16.91% as against the Sensex's 10.61% rise.

The large cap company has equity capital of Rs 262.99 crore. Face value per share is Rs 10.

The deal was announced by Reliance Infrastructure (RInfra) in February 2016 and has now been completed with transfer of shares and receipt of sale consideration. Reliance Cement Company Private Limited (RCCPL) has an integrated cement capacity of 5.08 million tonnes per annum (mtpa) at Maihar, Madhya Pradesh and Kundanganj Uttar Pradesh and a grinding unit of 0.5 mtpa at Butibori, Maharashtra. The deal valued cement business at Rs 4800 crore at $140 per tonne. The deal is earning per share accretive for shareholders of RInfra.

The entire proceeds shall be utilized for debt reduction. RInfra had announced its plan to monetise cement, roads and Mumbai power businesses to reduce the overall debt. The closure of cement deal is a significant milestone in this direction, the company added. Asset monetisation of roads and Mumbai power business is on track.

Birla Corp, established in 1919, is part of the MP Birla Group with presence across cement and jute; cement constitutes over 90% of the company's revenues. With a total operational cement capacity of 10 mtpa, it has units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.

RInfra has presence in three major business segments viz. infrastructure development, energy and defence.

Reliance Infrastructure's consolidated net profit rose 43.7% to Rs 659.85 crore on 3.2% fall in net sales to Rs 4260.87 crore in Q4 March 2016 over Q4 March 2015.

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