Ambuja & ACC jump post renewal of tech fees with Holcim

The shares of Holcim-promoted cement companies, Ambuja Cements & ACC Ltd were trading in the green on Thursday after the companies received board approval for paying technology fees to their parent company, Holcim Limited.   

Under the agreement, both the cement manufacturers will pay a technology & know-how agreement (TKH) fee at 1 per cent of the net sales each year to Holcim, according to their respective exchange filings. There were concerns that the TKH fee to Holcim might be raised and this led to a fall in the share prices of both the companies, earlier this month.   

The TKH fees, with the foreign promoter Holcim has been kept the same at 1 per cent of the net sales every year for two years with effect from January 1, 2021.  

With the announcement clearing the overhang on the stocks, both, ACC Limited & Ambuja Cements were trading up by 2.13 per cent and 3.90 per cent, respectively, at the time of market closing on Thursday.  

In the past three weeks, Ambuja Cements and ACC had underperformed the market by falling 9.47 per cent and 9.60 per cent, respectively, against a 4 per cent gain in the benchmark index till Wednesday.