Sagar Cements Limited has announced a significant corporate action involving the divestment of its stake in subsidiary Andhra Cements Limited. The company made this announcement on Thursday, January 8, outlining its plans to reduce its shareholding through a structured offer for sale mechanism.

Stake Divestment Details

The cement manufacturer will divest up to 8.14% of its stake in Andhra Cements Limited through an Offer for Sale (OFS). This divestment represents a strategic move by the parent company to restructure its shareholding pattern in the subsidiary.

Regulatory Compliance Objective

The primary objective behind this stake sale is to ensure compliance with minimum public shareholding requirements. Indian securities regulations mandate that listed companies maintain a minimum level of public shareholding, and this OFS will help Andhra Cements Limited meet these regulatory norms.

The offer for sale mechanism allows existing shareholders to sell their stakes to public investors through the stock exchange platform, providing liquidity while ensuring broader public participation in the company's ownership structure.

Strategic Implications

This divestment will result in a reduction of Sagar Cements' controlling stake in Andhra Cements Limited while simultaneously increasing the public float of the subsidiary. The move demonstrates the company's commitment to maintaining regulatory compliance and ensuring proper corporate governance standards across its group entities.

Sagar Cements Limited has officially announced a comprehensive offer for sale (OFS) of equity shares in Andhra Cements Limited, marking a significant divestment move to achieve minimum public shareholding requirements. The announcement follows regulatory approvals and outlines detailed trading mechanisms across BSE and NSE platforms.

OFS Structure and Key Details

The offer involves the sale of up to 75,00,000 equity shares of Andhra Cements Limited, representing 8.14% of the company's total paid-up equity share capital. The shares carry a face value of ₹10.00 each and will be offered at a floor price of ₹72.00 per equity share.

Trading Schedule and Investor Categories

The OFS follows a structured two-day timeline designed to accommodate different investor segments with specific access periods and settlement mechanisms.

January 09, 2026 (T Day): Non-retail investors will have exclusive access to place bids from 9:15 a.m. to 3:30 p.m. These investors may indicate their willingness to carry forward unallotted bids to the following day.

January 12, 2026 (T+1 Day): Retail investors can place fresh bids, while non-retail investors who opted to carry forward their unallotted bids may revise their positions during the same trading hours.

Allocation Methodology and Reservations

The allocation system incorporates specific provisions to ensure fair distribution across investor segments. A minimum 25% of offer shares are reserved for mutual funds and insurance companies, while retail investors have a minimum 10% reservation.

Retail investors are defined as individual investors placing bids for shares with a total value not exceeding ₹200,000 aggregated across stock exchanges. These investors have the option to bid at any price above the floor price or at a "Cut-Off Price" determined by the lowest price at which shares are sold in the non-retail category.

Regulatory Compliance and Shareholding Impact

The offer for sale serves as a mechanism to achieve minimum public shareholding requirements as prescribed under Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, and Regulation 38 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As of January 08, 2026, the aggregate promoter shareholding stands at 90% of the total paid-up equity share capital. Post completion of the proposed sale, the aggregate promoter shareholding in the company would be reduced to 81.86% of the total paid-up equity share capital.

Settlement and Trading Conditions

Settlement will occur on a trade-for-trade basis with different timelines based on investor categories and payment methods. Non-institutional investors must deposit 100% of bid value upfront, while institutional investors have options for both upfront and non-upfront payment mechanisms.

The OFS includes comprehensive provisions for international investors, with specific restrictions for US persons and compliance requirements for various jurisdictions. Multiple orders from single bidders are permitted, subject to prescribed conditions, and the offer may be cancelled if sufficient demand is not received at or above the floor price.

Recent Financial Performance Context

The stake sale comes amid mixed operating performance for Sagar Cements. In the September quarter, the company reported a net loss of ₹42.17 crore, narrower than the ₹55.77 crore loss recorded a year earlier. Revenue rose 27% year-on-year to ₹601.80 crore, while EBITDA more than doubled to ₹51.28 crore.

The OFS announcement follows comprehensive SEBI guidelines and includes detailed provisions for modification and cancellation of orders during trading hours, with specific timelines for different investor categories.