Azim Premji’s investment arm Premji Invest Opportunities Fund on Friday agreed to pick just over 10% stake in publicly-listed cement firm Sagar Cements Ltd for around Rs 350 crore (around $46 million), a regulatory filing said.
In a filing with the stock exchanges, Sagar Cements said. "The Board of Directors of Sagar Cements in their meeting held today has approved the issuance of 1,32,07,548 (1.32 crore) equity shares of face value of Rs. 2 each at an issue price of Rs 265/- per share on a preferential basis, to PI Opportunities Fund (PIOF), an affiliate of Premji Invest, an investment arm of Azim Premji..."
The stake sale on a preferential basis to Premji Invest will bring down the holding of promoters of Hyderabad-headquartered Sagar Cements to 45.2% from 50.28%.
The proceeds from the investment will be largely utilised towards meeting the organic and inorganic expansion plans of the Company along with funding its general corporate purposes.
S Sreekanth Reddy, Joint Managing Director, Sagar Cements said “We are delighted to partner with Premji Invest and look forward to their inputs towards strengthening our processes and systems and enhancing value for all our stakeholders.”
Post the investment, PIOF will own 10.10% of the Company and will have a nominee on the Board. Promoters’ ownership in the Company, after the allotment will be at 45.20% (from 50.28%).
Four-decade-old Sagar Cements with predominantly South India as its core market has expanded its market presence in East and Central India through its recent acquisitions.
The firm's production capacity currently standing at 8.25 million tons a year.
“Sagar Cements is a niche cement player with demonstrated cost leadership and a growing position in its focus markets in southern part of India. It has had a remarkable journey since inception and with expansion outside southern India through organic and inorganic plans, it is well positioned to become a pan India player," said Rajesh Ramaiah, Partner at Premji Invest.
He further said that they look forward to working together and helping the Company achieve its growth objectives and becoming a pan India brand with best-in-class governance processes.
Before the announcement, the shares of Sagar Cements closed at Rs 254.85 a share, higher by 1.51% from its previous close on BSE.