ACC was being bought by investors today on hopes that there could be a 20% open offer to minority shareholders of the company.

Mid-morning trades saw the scrip of India's largest cement maker hover higher by 3.02% at Rs 139.90. Over 2.78 lakh ACC shares were traded on BSE by 11:25 IST. Associated Cement Companies' (ACC) stock has now risen 10.4% from Rs 126.70 on 28 April 2003.

Interest in the stock is purely on hopes that an open offer is likely to take place in the cement company. These hopes have been generated due to the late Harshad Mehta's stake coming in for auction. As per market sources, Harshad Mehta held around 10.40-12.5% stake in ACC, which is now being auctioned under Mumbai High Court orders. The shares will be sold to the highest bidder. As per market talk, the auction of ACC's stake is likely to come up by 10 June 2003.

Currently, the Gujarat Ambuja group holds 14.45% stake in the company, but sources reveal that the group is not interested in acquiring the Harshad Mehta stake. If the group does move to acquire the stake, it will follow that GACL would have to make an open offer to the minority shareholders according to Sebi's Takeover Code, as its holding would cross the 15% threshold.

Reports also indicate that domestic financial institutions are not interested in picking up the ACC stake as well, as they already are flush with cement stocks in their portfolios.

Market players are betting that foreign players are likely to acquire the ACC stake, on the ground of establishing a foothold in India.  This should prove a threat to ACC - as any stake acquisition by a MNC would be followed by an open offer, even setting off a new management in ACC.

As on 31 March 2003, the public, institutions and foreign bodies held 35.48%, 26.66% and 19.60% stake respectively in ACC.

For FY 2002-03 , ACC recorded a 20.35% fall in net profit to Rs 103.89 crore (Rs 130.43 crore) on a marginal 1.75% rise in net sales to Rs 2,877.41 crore (Rs 2,827.91 crore).