Top News

Business Desk – UltraTech Cement Share may remain in focus today i.e. on 13th August due to a big Block Deal. Pilani Investment and Industries Corporation is going to sell about 17 lakh shares of the company. The minimum offer price for these shares has been fixed at Rs 11,481 per share. At this price, the value of the entire deal will be around Rs 1,908.5 crore.

This offer is about 0.57% of the total outstanding shares of UltraTech Cement. Since the shares are being sold by the existing shareholder, it is not a deal involving issuance of new shares by the company. That means there will be no new increase in the share capital of UltraTech from this transaction.

Offer about 3% cheaper than market price

Shares of UltraTech Cement had closed at around Rs 11,835 on BSE on August 12. In comparison, the minimum price for Block Deal has been kept at Rs 11,481 per share.

That means the offer price is about 3% less than the previous closing price. An amount of about Rs 1,908.5 crore is generated by selling 17 lakh shares at the minimum price of Rs 11,481.

In large institutional transactions, a common strategy may be to offer shares at some discount to the market price. However, the actual transaction price will be decided on the basis of demand received on the exchange.

Retail investors will not be able to buy

This Block Deal is for Institutional Investors. Retail investors will not be allotted shares in this transaction.

According to the documents, no additional guidance regarding the price will be given until the auction of shares on the exchange is completed on August 13. Institutional Investors will have to place their bids within the prescribed price range.

Trading window will close on 13th August

The trading window of this transaction has started on 12th August and is expected to close on 13th August. However, the option to close it before the scheduled time is also available.

Settlement of the deal is expected on August 14. A lock-in period of 60 days will also be applicable on the transaction. That is, after the deal, there will be a ban on further sale of the concerned shares for a fixed period. Jefferies India is the sole book runner and broker for this block deal.

Why can shares be affected?

With the news of such a big Block Deal, the stock of UltraTech Cement can come on the radar of investors in the market. Especially because the sale of 17 lakh shares is proposed at a price lower than the current market price.

However, Block Deal does not mean that there is something wrong in the company's business. In this an existing shareholder is selling his stake. Therefore, investors should look at this transaction separately from the fundamental performance of the company.

UltraTech's Green Energy Plan also in discussion

Apart from Block Deal, another corporate update of UltraTech Cement has come out. The company has entered into Energy Supply Agreement, Share Subscription and Shareholders Agreement to acquire 26% Equity Stake in Solaris Horizon Energy Private Limited. solaris horizon energy is in the business of generation and transmission of renewable energy.

Focus on Green Energy with 26% stake

According to UltraTech, the purpose of investment in Solaris Horizon Energy is to meet the company's green energy requirements, better manage energy costs and comply with regulatory provisions to captive power consumption.

This means that on one hand, the potential Institutional Block Deal of about Rs 1,908 crore in UltraTech will be in the focus of the market, while on the other hand, the decision to take 26% stake in Renewable Energy is important in terms of the company's long-term energy strategy.

Today's two big updates for investors

Two events will be special for UltraTech Cement on 13th August. First, Pilani Investment's block deal of 17 lakh shares and second, plan to take 26% stake in Renewable Energy Company.

Block Deal may affect short-term sentiment on the stock, whereas Green Energy Investment is a step to the company's Long-Term Cost Management and Sustainable Energy Strategy.