Shares of RHI Magnesita India surged 14% to Rs 735 per share in intraday trade on Monday after the company announced the acquisition of Dalmia Bharat Refractories Limited’s (DBRL) Indian refractories business for Rs 1,708 crore.

Shares of the refractory company were trading near its 52-week high of Rs 738.10 on October 21, 2022. The S&P BSE Sensex was down 1% at 61,085 at 2:36 pm. Shares of RHI Magnesita have risen 110% over the past year, compared with a 2.5% gain for the benchmark index.

RHI Magnesita India is India’s leading supplier of advanced refractory products, systems and solutions for high industrial temperatures above 1,200 degrees Celsius for various industries such as steel working, cement, non-ferrous metals and glass. DBRL is one of the leading refractory producers in India and a trusted long-term partner of customers in the region.

“DBRL will transfer its Indian refractories business to Dalmia OCL (DOCL). Under the terms of the share swap agreement, RHI Magnesita will acquire all outstanding shares of Dalmia OCL (DOCL) in exchange for 27 million new shares in RHI Magnesita India. Based on RHI Magnesita India’s issue price of Rs 632.5029 per share, the value of the share consideration is approximately Rs 1,708 crore,” RHI Magnesita said.

By integrating the production of DBRL into RHI Magnesita’s existing operations, management believes that significant network optimization synergies will be realized. Additionally, the acquisition will add capacity in key industrial areas in southern and western India, where RHI Magnesita currently has no assets.