JK Lakshmi Cement to merge three subsidiaries

JK Lakshmi Cement's board has approved the merger of three of the company's subsidiaries: Udaipur Cement Works (UCWL), Hansdeep Industries and Trading Co, and Hiddrive Developers and Industries. The appointed date for the merger is set for 1 April 2024. The Scheme of Arrangement is expected to become effective in the 2H24.

Key details of the merger include the merger of Udaipur Cement Works, where shareholders of UCWL will receive four shares of JK Lakshmi Cement for every 100 shares held in UCWL. Additionally, for the mergers of Hansdeep Industries and Hidrive Developers, no new shares will be issued as JK Lakshmi Cement already owns all shares of both companies.

Following the merger, JK Lakshmi Cement will have two subsidiaries. The company will hold a 100 per cent stake in Hansdeep Industries' subsidiary, Ramkanta Properties and maintain an 85 per cent stake in Agrani Cements.

As of 1QFY24-25, JK Lakshmi Cement's total cement capacity stands at 11.7Mta while clinker capacity is 7Mta. Udaipur Cement Works has a 4.7Mta integrated plant in Rajasthan with a clinker capacity of 3Mta. Hidrive Developers owns an industrial plot adjacent to the Surat Grinding unit, and Hansdeep Industries is a preferred bidder for limestone mines at Nagaur, Rajasthan.

This strategic restructuring aims to streamline operations and consolidate the company’s market position, leveraging the strengths of its subsidiaries to enhance overall efficiency and profitability.