Shares of Dalmia Bharat fell 5% to Rs 1,807 on the BSE in intraday trade on Tuesday after the company won the takeover of Jaiprakash’s power and cement units. The enterprise value of the said acquisition is Rs 5,666 crore.

Dalmia Cement Bharat Ltd (DCBL), a wholly-owned subsidiary of Dalmia Bharat, on Monday, signed a binding framework agreement to acquire clinker, cement and power plants from Jaiprakash Associates and its related parties, with a total cement capacity of 9.4MnT (plus 6.7MnT clinker capacity and 280MW thermal power plant), the company said in a press release, for an enterprise value of Rs 5,666 crore. The assets are located in Madhya Pradesh, Uttar Pradesh and Chhattisgarh.

This acquisition will enable Dalmia to expand its footprint in the central region and towards realising its vision of emerging as a pan-India cement company with a capacity of 75 MnT by FY27 and 110-130 MnT by FY31 would represent a significant step forward.

Despite today’s loss, shares in Dalmia Bharat rose 10%, outperforming the broader market, while the S&P BSE Sensex rose 0.8%. It has gained 46% over the past three months, compared with an 18% gain for the benchmark index.

Meanwhile, the market price of Jaiprakash Associates (JAL) fell 8% to Rs 10.81, down 13% from today’s intraday high. Jaiprakash Power Ventures was also down 5% at Rs 7.90 in intraday trade on the BSE.

The company has been taking steps to reduce debt, repay loans and aggressively meet commitments. In this regard, JAL divested over 20 MTPA cement capacity between 2014 and 2017 in favour of UltraTech Cement while selling a controlling stake in 20+ MTPA cement capacity to Dalmia Group in 2015.

JAL decided to divest its cement business entirely to repay lenders and focus on other core work areas. By selling 9.4 MTPA of cement capacity to Dalmia Cement (Bharat), we hope and pray that after showing its solid work, JAL will further solidify its credibility as a trusted organisation in the country’s infrastructure sector, come on JAL Executive Chairman Manoj Gaur said.