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.

Andhra Cements Limited , a subsidiary of Sagar Cements Limited, has announced a significant upgrade to its manufacturing capabilities. The company has successfully installed and commenced operations of a new 6-stage preheater at its plant in Sri Durga Cement Works, Dachepalli Mandal, Palnadu District, Andhra Pradesh.

Capacity Expansion

The installation of the new 6-stage preheater is part of a broader modernization and expansion project aimed at enhancing the company's production capacity. Key highlights of the expansion include:

This substantial increase in both clinker and cement production capabilities positions Andhra Cements to meet growing market demands more effectively.

Project Timeline and Progress

The company disclosed that the 6-stage preheater commenced operations on October 23, 2025. While this crucial component is now operational, Andhra Cements noted that cement mill works are still in progress at the plant.

Financial Performance

In conjunction with this operational update, Andhra Cements also released its unaudited financial results for the quarter and half-year ended September 30, 2025. Key financial highlights include:

Despite the increase in revenue, the company continues to face challenges, as evidenced by the widening losses.

Strategic Initiatives

Andhra Cements is actively pursuing strategies to improve its financial position:

1. Rights Issue: The company's board has approved a proposal to raise up to ₹18,000.00 lakhs through a rights issue to existing shareholders.

2. Asset Optimization: Plans are underway to sell unused land parcels, with the sale expected to be completed in the current financial year 2025-26.

These initiatives demonstrate Andhra Cements' commitment to strengthening its financial foundation while expanding its operational capabilities.

The installation of the new 6-stage preheater marks a significant milestone in Andhra Cements' growth strategy. As the company continues to navigate challenging market conditions, this capacity expansion could play a crucial role in its efforts to improve performance and market position in the coming quarters.