Reliance Infra jumps after reports of plans to sell cement business

Reliance Infrastructure jumped 6.8% to Rs 489 at 13:15 IST on BSE after reports that the company is in advanced talks to sell its cement business for Rs 2600 crore.

Meanwhile, the S&P BSE Sensex was down 3.77 points or 0.01% at 25,846.53.

A spurt in stock price was accompanied by a surge in volumes on the counter. On BSE, so far 7.67 lakh shares were traded in the counter as against average daily volume of 3.6 lakh shares in the past one quarter.

The stock hit a high of Rs 491.50 and a low of Rs 462.40, so far during the day. The stock had hit a 52-week high of Rs 525.35 on 2 January 2015. The stock had hit a 52-week low of Rs 282.20 on 25 August 2015.

 

The stock had outperformed the market over the past one month till 23 December 2015, rising 9.85% compared with 0.12% rise in the Sensex. The scrip had also outperformed the market in past one quarter, gaining 35.9% as against Sensex's 0.11% gains.

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

The report added that the deal could be announced as soon as later this week. Under the terms of the deal, the buyer would also take over the cement unit's outstanding debt of Rs 2400 crore, giving the business an enterprise value of Rs 5000 crore. The sale proceeds would be used to pare the Reliance Anil Dhirubhai Ambani (ADA) group's debt, report said.

As per a separate report, Reliance Defence, a wholly-owned subsidiary of Reliance Infrastructure and Russian United Shipbuilding Company (USC) will build four Talwar class frigates for the Indian Navy. Both the companies are expected to sign a pact in this regard in Moscow, which coincides with Prime Minister Narendra Modi's ongoing visit there. These four frontline warships will be built at a cost of around Rs 30000 crore at the Reliance Infra's recently acquired shipyard at Pipavav, Gujarat. The agreement also includes a partnership for refit and modernisation of all Indian Navy surface ships of Russian and Soviet origin at the Pipavav Shipyard, report added.

On a consolidated basis, Reliance Infrastructure's net profit rose 4.6% to Rs 451.13 crore on 7.1% growth in net sales to Rs 4323.87 crore in Q2 September 2015 over Q2 September 2014.

Reliance Infrastructure is amongst the largest infrastructure companies, developing projects through various special purpose vehicles (SPVs) in several high growth sectors within the infrastructure space i.e. roads, metro rail and cement. The company is also the leading utility company having presence across the value chain of power businesses i.e. generation, transmission, distribution and power trading. The company also provides engineering, procurement and construction (EPC) services for developing power and road projects.

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