Andhra Cements shares hit a 10% upper circuit, reaching ₹75.86 compared to the previous day's closing price of ₹68.97. The surge came after the company's promoter, Sagar Cements, announced a stake sale through the Offer for Sale (OFS) route to comply with SEBI's minimum public shareholding requirements.

Regulatory-Driven Stake Sale Details

The proposed stake sale is a compliance-driven process rather than a corporate decision. Currently, Sagar Cements holds 90% of Andhra Cements' equity capital, which exceeds SEBI's minimum public shareholding (MPS) requirements.

The OFS will be structured with non-retail investors participating on Day 1 and retail investors on Day 2. The promoter has committed to not purchasing any shares during the OFS window period.

Market Impact and Implications

With a market capitalization of ₹688.00 crores, the stake dilution may create short-term supply pressure. However, the increased public shareholding is expected to improve liquidity, trading depth, and institutional interest over the medium term. Since the sale is not linked to operational stress or capital requirements, it should be viewed primarily as a regulatory compliance exercise.

Financial Performance

The company demonstrated strong revenue growth in its recent quarterly results:

Company Background

Established in 1936, Andhra Cements is one of India's oldest cement-producing companies. The company has experienced multiple ownership changes, having been operated by BDCL, the Duncan Goenka Group, and the Jaypee Group. Following severe financial difficulties, production was shut down from February 2020 to March 2023, and the company entered insolvency under the IBC.

In March 2023, Sagar Cements acquired a 95% stake through an NCLT-approved resolution plan, investing ₹322.25 crores and resuming operations. The company now operates two plants at Dachepalli in Palnadu district, Andhra Pradesh, and Visakhapatnam, both with full limestone linkage.

Andhra Cements shares experienced a remarkable surge on Friday, jumping 10% to hit the upper circuit limit as the company's promoter launched an Offer for Sale (OFS) at an attractive premium to the prevailing market price.

Stock Performance and Trading Activity

Andhra Cements stock climbed as much as 9.99% to ₹75.99 in early trade, marking the biggest intraday gain since August 2025. The sharp price movement was accompanied by exceptional trading volumes, with more than 1.41 lakh shares changing hands during the session, significantly exceeding the 30-day average volume of approximately 16,200 shares.

OFS Details and Structure

Sagar Cements, the promoter company, is divesting up to 75 lakh equity shares of Andhra Cements, representing 8.14% of the company's paid-up equity capital. This divestment is being undertaken to comply with minimum public shareholding requirements.

The sale is being conducted through a separate window on both the NSE and BSE exchanges. The floor price has been strategically set at ₹72 per share, implying a premium of roughly 8.9% to Andhra Cements' closing price on Thursday.

Shareholding Pattern and Subscription Data

As of the quarter ended September 30, Sagar Cements held approximately 90% stake in Andhra Cements, with public shareholders owning the remaining 10%. Bid data available by noon on Friday revealed cumulative bids of 18.7 lakh shares, translating into a subscription of about 27.7% for the non-retail portion. All bids were placed with 100% margin, according to exchange data.

Parent Company Financial Performance

The stake sale comes against a mixed operating backdrop for Sagar Cements. The company's recent financial performance shows signs of improvement despite challenges.

Sagar Cements has maintained its full-year volume guidance of 6 million tonnes, indicating confidence in operational performance. However, shares of Sagar Cements had ended 4.6% lower at ₹206.90 on Thursday, ahead of the OFS announcement.

Market Outlook

The positive market response to the OFS launch, evidenced by the upper circuit hit and substantial premium pricing, reflects investor confidence in Andhra Cements' prospects. The successful opening day subscription of 27.7% for the non-retail portion indicates strong institutional interest in the offering.