This smallcap cement stock falls 9% as OFS opens for retail investors; 1-year return at 1738%

Andhra Cements shares plunged in Wednesday’s trade (February 28, 2024) as the company’s offer for sale (OFS) opened today for retail investor class.

At around 11:57 am, shares of the company traded with a gap down of nearly 8 per cent at Rs 103.8 per share on the BSE, while at the day’s low, the stock plunged 9 per cent to Rs 102.4.

The stake sale was initiated on February 27, and the release by the company said that the divestment process will be completed onwards until February 28, 2024, or the actual date of completion of the sale of all equity shares, in a single or multiple trenches.

“The aggregate promoter shareholding as of February 26, 2024, is 95 per cent of the total paid-up equity share capital of the company. Post-completion of the aforesaid sale, the aggregate promoter shareholding in the company would be reduced to 90% of the total paid-up equity share capital of the company,” noted the company’s filing.

The floor price for the offer has been decided at Rs 90 per share, a discount of nearly 19 per cent to Monday’s close.

Andhra Cements, over a one-year timeframe, has given a whopping return of 1,738 per cent. The company is trading at cheap valuations with a TTM PE, or trailing price to earnings (P/E), below the industry median of 0.9.

Furthermore, the RSI, or relative strength index, below 50 indicates that more traders are selling the stock than buying, hence pushing the price lower.

Andhra Cements Limited is a cement manufacturer engaged in the manufacture and sale of cement, including ordinary Portland cement, Portland pozzolana cement, Portland slag cement, and ground-granulated blast slag.