This Article is From Jun 22, 2012

Cement stocks plunge on cartelisation penalty

Cement stocks plunge on cartelisation penalty

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New Delhi:

Cement stocks were the top losers on the back of the stiff penalty imposed by the Competition Commission of India, which had fined 11 Indian cement companies in a price collusion investigation. These 11 companies will have to pay in excess of Rs 6,000 crore in penalties.

The cement manufacturers upon whom the penalty has been imposed are ACC, Ambuja Cements Limited, Ultratech Cements, Grasim Cements (now merged with Ultratech Cements), JK Cements, India Cements, Madras Cements, Century Cements,   Binani Cements, Lafarge India and Jaypee Cements.

JP Associates (-3.35 per cent), ACC (-3 per cent), Grasim Industries (-2.8%), and Ambuja Cements (-2.7%) were the top four losers on the Nifty index.

Here is how the 11 firms penalised for cartelisation will be affected.
1) ACC: It will have to pay Rs 1,147.6 crore in penalty, which is 80 per cent of estimated FY13 profit after tax and 5 per cent of the company's current market capitalisation.

2) Ambuja Cements: It will have to pay Rs 1,163.9 crore in penalty, which is 76 per cent of estimated FY13 profit after tax and 4 per cent of the company's current market capitalisation.                   

3) Ultratech Cement: It will have to pay Rs 1,175.5 crore in penalty, which is 45 per cent of estimated FY13 profit after tax and 3 per cent of the company's current market capitalisation.

4) India Cement: It will have to pay Rs 187.5 crore in penalty, which is 60 per cent of estimated FY13 profit after tax and 7 per cent of the company's current market capitalisation.

5) Madras Cement: It will have to pay Rs 258.6 crore in penalty, which is 7 per cent of the company's current market capitalisation.      

6) JP Associates: It will have to pay Rs 1,323.6 crore in penalty, which is 8 per cent of the company's current market capitalisation.

7) JK Cement: It will have to pay Rs 128.5 crore in penalty, which is 13 per cent of the company's current market capitalisation.

8) Century: It will have to pay Rs 274 crore in penalty, which is 10 per cent of the company's current market capitalisation.