Dalmia Cement Down By 75%

MUMBAI, INDIA (GaeaTimes.com)- Dalmia Cement is down by 75 % and is trading at a 52 week low at Rs.50. Yesterday the share moved up 9.28% and was trading at Rs. 262.55 before market close. The market capital came down to Rs 555 crore from Rs 2250 crore. The reason being attributed for this sharp correction is the restructuring scheme for which the ex date is today itself. Dalmia Cement (bharat) had announced earlier this year that its cement, power and refractory business would be demerged to a new entity, Dalmia Bharat Enterprises. The shareholders are entitled to the shares of the new entity in the ratio of 1:1.

Dalmia Cement (bharat) has been changed to Dalmia Bharat Sugar and Industries Ltd with effect from September 7 as told by the registrar of the company. NSE had announced the exclusion of the company with effect from 24th september. The restructuring of the company was done on the grounds of enhancing the fund raising flexibility along with the creation of independent entities.

Dalmia Cement is though offering good compensation to its shareholders. The share ratio of 1:1 may appear to be lucrative for those who want to take a long term perspective and see how things shape up. The sugar business is reported to have been retained in the parent company. An individual and independent entity is more focused and the decisions follow smoothly. Perhaps this may be one of the reasons behind the restructuring of the company. In the long run how well Dalmia Bharat Enterprises ltd. does is yet to be seen. Nothing has been reported about the expectations that the shareholders have and their perspective of the company in the long run.