Takeover of Raasi Cements by India Cements

There were 117 plants belonging to 59 companies spread across the length and breadth of the country, with an installed capacity of 109.97 mtpa. In the early 1990s, the industry expanded considerably as new plants with large capacities came up. The success of the economic reforms of the early 1990s was a boost to the expansion plans of the cement companies. However, in the mid and late 1990s, as demand for cement declined, the share prices of most companies fell. In the late 1990s, acquisitions triggered off consolidation in the cement Industry. The process of consolidation started in 1998 with ICL taking over Visaka Cement and CCI's plant at Yerraguntla, (Andhra Pradesh) and Grasim taking over Dharani Cement and Shri Digvijay Cements...

In February 1998, Srinivasan announced an open offer to acquire an additional 20% of Raasi's equity. He offered Rs 300 per share, 72.41% above the stockmarket price of Rs 174 on February 26, 1998. Raasi's shareholders seemed to find it hard to turn down his offer. On March 1, 1998, the state-owned APIDC sold its 2.13% stake in Raasi to ICL. Subsequently, a Chennai-based stockbroker, Valampuri & Co., cornered 1.40 % of Raasi's equity from the market for Srinivasan, taking ICL's stake in Raasi to 21.56%. Srinivasan was also negotiating with V.P. Babaria, a transporter for both ICL and Raasi, to pick up his 7% stake in the latter. If Babaria sold his stake, ICL's stake in Raasi would go up to 28.56%...