Autoriders’ bid fails to bring cheer to Saurashtra scrip

MUMBAI, March 23: The open offer made by Autoriders to buy Saurashtra Cements has failed to cheer the stock markets with the scrip losing ov...

MUMBAI, March 23: The open offer made by Autoriders to buy Saurashtra Cements has failed to cheer the stock markets with the scrip losing over 9 per cent on Monday. Brokers say the market does not read much into the offer from Autoriders Finance as their line of business is poles apart from cement manufacturing.

"They may be bidding for some third party, but they have to disclose that," an analyst with a FII said. Another broker pointed out that uncertainty over Gujarat Sidhee may be a detterent and the present promoter Mehtas over 50 per cent stake in Saurashtra Cements is another negative point for Autoriders.

"Besides, after the initial euphoria on these hitherto absent culture of takeovers, the market is realising the road blocks in such a process," a broker added.

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Monday was a day of reverse swing for Saurashtra Cements on the Mumbai Stock Exchange. While the 120-point rally on the BSE percolated to BI stocks, it failed to activate punters at the Saurashtra counter. The scrip lost more than 9 percent to close at Rs 59 against the Friday close of Rs 65. A day after the open bid for Saurashtra Cements by Autoriders’ Finance, the scrip started losing ground.

The scrip peaked at Rs 68 on Wednesday after it started rising from Rs 50. In the last two trading sessions ending on March 20, the scrip lost Rs 9 and closed at Rs 59 on Friday. Thus, unlike in the case of Indal, where the market price breached the offer price of Rs 90, Saurashtra Cement remains well below the offer price of Rs 75.

The market perception differs on the fall in price in the case of Saurashtra Cement. According to a Bombay-based broker, There was positive news on the Indal front as the scrip inched closer to the revised offer price from Sterlite Industries of Rs 115. The scrip rose from its Friday’s price of Rs 104 to end the Monday’s trading at Rs 111. Earlier, Canada-based alumimnum major, Alcan had made a counter-bid at Rs 105 and the company holds close to 35 per cent in Indian Aluminium. However, the scrip may soon stagnateat the current level or even drop but for a revised offer from Alcan.

Meanwhile, for the third company in the eye of the takeover storm, Raasi Cements gained Rs 9 to close to Rs 201 on the BSE. The gain may have come due to an attrcative valuation.