Synopsis: Andhra Cement hit a 10% upper circuit, as the company’s promoter, Sagar Cements, made an announcement regarding the sale through the Offer for Sale (OFS) route of 8.14% OFS (75 lakh shares) to make the company eligible for SEBI MPS norms.
The shares of this company, which is in the business of manufacturing and selling cement, had its shares in focus after the company announced that the promoter entity “Sagar Cements Ltd” will sell a stake in the company for regulatory compliance.
With the market cap of Rs 688 crore, the shares of Andhra Cements Ltd has reached a high at Rs 75.86, hitting 10% U.C. compared to its previous day’s closing price of Rs 68.97.
About the stake sale
The proposed stake sale in Andhra Cements is a regulatory-driven process and not a corporate decision. Currently, the promoter of Sagar Cements holds a majority of 90% of the equity capital of the company, which is in excess of the permissible SEBI’s minimum public shareholding (MPS). To correct this position, the promoter has made a public announcement regarding the sale of up to 8.14% of its equity capital of 75 lakh shares through the Offer for Sale (OFS) route between January 9 and January 12, 2026.
After the completion of the OFS, there will be a decrease in the promoters’ holding to 81.86%, which will improve the free float to make Andhra Cements SEBI-compliant once again. The OFS will be carried out on BSE as well as NSE platforms, which will be divided for both non-retail and retail investors on Day 1 and Day 2, respectively. The crucial thing to note here is that the promoter has promised that it will not undertake any purchase of shares during the OFS window period.
From a market point of view, such stake dilution often creates short-term supply overhang that can pressure the stock in the near term. However, structurally, a higher public shareholding improves liquidity, trading depth, and institutional interest over time. Since the sale is not linked to operational stress or capital needs, the move should be viewed as a compliance exercise, with medium-term benefits once the additional supply is absorbed by the market.
Financial highlights
The revenue from operations for the company stood at Rs 78 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 55 crores, up by about 42 per cent YoY. However, the net loss stood at Rs 42 crore in Q2 FY26, up from Rs 35 crore in Q2 FY25.
Andhra Cements Limited, established in 1936, is one of the oldest cement-producing companies in India with a history of promoter and management acquisitions and exits. After being operated by BDCL, the Duncan Goenka Group, and then the Jaypee Group, the company again encountered severe financial difficulties, resulting in a production shutdown from February 2020 to March 2023 and full insolvency under the IBC.
In March 2023, Sagar Cements Limited acquired a 95% stake in the company under an NCLT-approved resolution plan, injecting a total of Rs 322.25 crores and resuming production. Andhra Cements now has two plants at Dachepalli (Palnadu district, Andhra Pradesh) and Visakhapatnam with full limestone linkage and is a direct subsidiary of the Sagar Group.
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