Mumbai: Shares of Jaiprakash Associates on Thursday fell by over 8 per cent on profit-booking after the Aditya Birla group company UltraTech Cement announced the acquisition of Jaypee Cement Corporation's (JCCL) Gujarat unit for Rs. 3,800 crore.
The deal was announced post market hours yesterday. Despite a positive opening, shares of the company went into a tailspin as the trade progressed and lost 8.29 per cent to Rs. 39.80 on the BSE. On the NSE, the scrip tumbled 8.29 per cent to Rs. 39.80.
On the other hand, shares of UltraTech Cement gained 5.52 per cent to Rs. 1,828 on the BSE.
Jaypee Cement Corporation Limited (JCCL) is a wholly owned subsidiary of Jaiprakash Associates. The deal, to be completed in seven to nine months, will further cement UltraTech's numero uno position in the market and give it an entry into Gujarat.
For the Jaypee Group, it will help pare a portion of its Rs. 55,000 crore debt.
The acquisition will be funded through equity of Rs. 150 crore, debt worth Rs. 2,000 crore and the remainder of Rs. 1,650 crore through internal accruals. Jaypee Cement had Rs. 350 crore of carry forward losses.
Infra major Jaypee Group had said the sale of the Gujarat cement plant will reduce its debt by Rs. 3,600 crore in the current financial year.
