The Jaiprakash Associates (JAL) stock was up 32 per cent while that of Ultratech Cement was marginally down by about 1 per cent over the week. The two companies finally sealed an agreement over the sale of the 21.1 million tonnes (mt) cement business of JAL. The deal value is ₹16,189 crore — ₹289 crore more than what was agreed upon previously. Reports earlier had hinted at the deal falling through over valuation concerns.

For JAL with about ₹58,240 crore of debt, this deal comes as a relief as it would help reduce its leverage levels. The Ultratech stock was down as it would end up paying a little more than what it had quoted.

Yet, the deal is a good one for Ultratech — with the revised enterprise value per tonne of the cement assets of JAL working out to $113 ($111 earlier) per tonne. This is still below the replacement cost of $120-125 per tonne. This acquisition will help Ultratech move towards its targeted 100 mt (currently 91.2 mt) cement capacity.

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