Leading infrastructure stock hits a 20 percent upper circuit, reaching Rs.565.85 per share, after Adani Group acquires a 46.64 percent stake from the promoters of the company.
Share Price Movement
In Friday’s trading session, ITD Cementation India Ltd’s shares hit a 20 percent upper circuit to Rs.565.85 per share, from the previous closing price of Rs.471.35 apiece.
Rationale for the rise
The Adani Group is set to acquire the promoter’s 46.64 percent stake in ITD Cementation India to strengthen its civil engineering capabilities, according to sources. If the deal goes through, it would be valued at around Rs.5,888.57 crore ($700 million), including a fully subscribed open offer that will follow the purchase of the promoter’s stake.
Both parties reached an agreement earlier this week, and ITD Cementation is yet to publish a clarification on the agreement. Gautam Adani’s infrastructure conglomerate is expanding its portfolio in airports, highways, ports, power plants, and real estate.
ITD Cementation India is an engineering, procurement, and construction (EPC) company with origins in the UK, dating back to before India’s independence and having changed ownership several times.
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As of the end of the June quarter, ITD’s promoter, Italian-Thai Development Public Co, held a 46.64 percent stake. In July, the company informed the stock exchanges that “the promoter shareholders of ITD Cementation India are exploring a potential divestment of their investments in the company.”
Latest developments
ITD Cementation India is a leader in maritime structures and engineering projects, including the Delhi and Kolkata metro systems, as well as ports in Tuticorin, Haldia, Mundra, and Vizhinjam.
Maritime structures make up 34.5 percent of its order book, its largest vertical. The company has an existing partnership with Adani in hydel power, marine projects, and the Ganga Expressway toll road.
A few recent orders of ITD Cementation include a Rs.1,082 crore contract for the Dahej LNG Terminal, along with projected orders totaling Rs.8,000-10,000 crore for FY25.
Financial Performance
According to ITD Cementation India Ltd’s latest financial update, revenue increased by 30 percent to Rs.2,381 crore in Q1 FY25 from Rs.1,833 crore in Q1 FY24. The company’s net profit increased 92 percent to Rs.100 crore, from Rs.52 crore in the same period.
Company Profile
ITD Cementation India Ltd is an engineering, procurement, and construction (EPC) company that specializes in a wide range of infrastructure projects, including maritime structures, metro systems, and dams.
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Written by – Siddesh S Raskar
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