A day after the Competition Commission of India came out with a heavy fine on select cement companies for cartelisation, some of these companies have responded to the action by it.
While two of these companies — ACC and Ambuja Cements — have vowed to contest the order delivered against them by taking their appeal to the Competition Appellate Tribunal, UltraTech Cement was a tad cautious in its response stating that it would take appropriate action after examining the order.
ACC Ltd has, in a communication to the stock exchanges today, estimated the penalty of “0.5 times the profit for the year 2009-10 and 2010-11’’ levied by CCI would work out to about Rs 1,147.59 crore.
Stating that it had provided the information and clarification sought by the competition watchdog, ACC felt “aggrieved by this order’’ and said it “will appeal against it before the Competition Appellate Tribunal’’.
Ambuja Cements Ltd said the fine levied on it was Rs 1,163 crore. The company contested the allegations and findings against it and said it would go on appeal to the Appellate Tribunal and would “seek a stay on the aforesaid penalty’’.
UltraTech Cement Ltd, belonging to the Aditya Birla group, said the penalty imposed on it was Rs 1,175 crore. It said “the company will take appropriate action after having fully examined the order’’.
Stocks battered; Shree Cements buck trend
Despite the combative mood of some of the the cement companies, the investors seemed to be nervous which sent their stock prices down.
But one stock bucked the trend - Shree Cements - as the company did not come under the CCI scanner, with the share gaining about 4 per cent.
ACC was down Rs 51.80 or 4.12 per cent with the stock trading at Rs 1,204 on the BSE. This was accompanied by a sharp upturn in trading volume. The stock had already witnessed 1.34 lakh shares changing hands before 1 p.m. today against the average two week volume of 99,000 shares.
Ambuja Cements was another stock that recorded a sharp spike in volume while the stock price was down. The stock was down 3.44 per cent. The counter had witnessed a trading volume of 3.85 lakh shares so far against the average two- week volume of 4.15 lakh shares.
UltraTech Cement slipped by Rs 23.05 to Rs 1,440.50. The share had witnessed a trading volume of 16,459 shares already (5,335 a.vol). India Cements was down by Rs 3.90 to Rs 80.50 with a trading volume of 2.23 lakh shares (2.64 lakh). Madras Cements declined Rs 7.65 to Rs 148.40 with 43,000 shares being traded against the average volume of 59,000 shares.
But Shree Cements ’ shares bucked the market trend and moved in the opposite direction. The stock was up Rs 112.55 or 4.15 per cent to Rs 2,825. The volume of trading was 1638 compared to two week average of 4,637 shares.
The contra move clearly showed investors' nervousness about the order since the penalty levied was hefty.