Actis to pick up stake in Dalmia Cements

By agencies   |   Monday, 13 March 2006, 20:30 IST
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NEW DELHI: Private equity investor Actis is set to pick up stake in cement manufacturer Dalmia Cements (Bharat) Ltd at an investment of about $25 million. According to the sources, the U.K-based equity firm will pick up about 11 percent stake in the company, which had a turnover of $117.95 million in the last financial year. Actis has raised funds of approximately $500 million for investments in the Indian market and its past/current investments in India include Punjab Tractors, UTI Bank and Glenmark. This is the equity firm's first investment in the cement sector in India. The cement sector has been seeing much merger and acquisition action over the last couple of years, as increased infrastructure development projects and the real estate boom are fueling growth in the sector. At the beginning of the year, one of the largest deals being struck in the sector was Swiss cement major Holcim buying controlling stake in Gujarat Ambuja. Late 2005 also saw two significant deals in the sector. Hong Kong-based Asia Debt Management made an investment of $57 million in India Cements while Prudential ICICI and DSP Merrill Lynch together acquired a 7.4 percent stake in Orissa-based cement manufacturer, OCL India. Indian cement companies have been ramping up capacity to meet increased demand. In fact, data shows that cement production in India has recorded a compound annual growth rate of 8.2 percent between 1994 and 2003, while the world average is 3.5 percent. Analysts point out that the future for the cement sector looks bright. In fact the Indian cement industry is expected to cross 150 million tones in dispatches, including domestic consumption and exports, during 2005-06 with a large percentage of sales coming from the South where Dalmia Cement's facility is located.