This company stock skyrocketed 9 per cent on acquiring the refractory business of Dalmia Bharat
RHI Magnesita shines on planning to acquire the Indian refractory business of Dalmia Bharat Refractories.
RHI Magnesita closed trading at Rs 702.65, up by 57.25 points or 8.87 per cent from its previous closing of Rs 645.40 on the BSE. The scrip opened at Rs 664.50 and has touched a high and low of Rs 679.80 and Rs 655.00, respectively.
The BSE group 'A' stock of face value of Rs 1 has touched a 52-week high of Rs 738.10 and a 52-week low of Rs 325.00.
RHI Magnesita India is planning to acquire the Indian refractory business of Dalmia Bharat Refractories (DBRL). DBRL is one of India’s leading refractory players and a long-term trusted partner to customers in the region. DBRL will transfer its Indian refractory business to Dalmia OCL (DOCL). Under the terms of a Share Swap agreement, RHI Magnesita will acquire all outstanding shares in Dalmia OCL (DOCL) in exchange for 27 million new shares in RHI Magnesita India. Based on the issuance price of RHI Magnesita India at Rs 632.5029 per share, the Share Consideration had a value of around Rs 1,708 crore. RHI Magnesita will consolidate DOCL’s earnings and around Rs 443 crore of net debt held by DOCL.
The acquisition will significantly increase RHI Magnesita’s presence in the fast-growing Indian refractory market, with forecast steel production growth in India of 12 per cent in 2022 and a 7-8 per cent compound annual growth rate until 2030. Through the consolidation of DBRL’s production into RHI Magnesita’s existing operations, significant network optimisation synergies will be captured. The company employs approximately 1,200 people in India and has a production capacity of more than 300,000 tons of refractory annually, from five refractory plants and raw material sites. The acquisition will add production capacities in important industrial regions in the south and west of India where RHI Magnesita currently has no assets.
RHI Magnesita India offers a wide range of Refractory and Monolithic products for the iron and steel industry and enjoys a large domestic and international clientele.
The promoters holding in the company stood at 70.19 per cent, while Institutions and Non-Institutions held 10.88per cent and 18.91 per cent, respectively.