"There is absolutely no room for a takeover of DLF Cement," Gujarat Ambuja treasurer Anil Singhvi told The Financial Express.

Stating that a possible buyout of the ailing 1.4 million tonnes per annum DLF Cement did not make minimum financial sense, Singhvi said: "DLF Cement has debt outstandings of over Rs 380 crore, and if I am to add a price of Rs 185 crore, which is what was reported as proposed, the total takeover liability will be in the region of Rs 560 crore for a 1.4 million tonne cement facility. This definitely does not make financial sense."

"We do receive several proposals for buying out companies, but a proposal merely tells only one side of the story. All I can say is that various aspects are looked into before taking such a key decision, and I will like to reiterate that there is simply no room for takeover of DLF Cement,"Singhvi said.

It is understood that Gujarat Ambuja's refusal to takeover DLF Cement stems from the fact that DLF is all set to end the year with a loss in the region of Rs 50 crore. "Taking into account the share capital of the company which stands at Rs 128 crore, the company's net worth may even turn negative over the next two years. With BIFR prospects looming large, a takeover by Gujarat Ambuja seems quite unlikely at this stage," a cement analyst said.

Industry sources said the DLF Cement scrip was quoting at Rs 5 barely two months back, and a negotiated deal at Rs 18-20 per share will be too big a price for the 1.4 million tonne cement facility.

Gujarat Ambuja is also understood to have given up its earlier plans to spread its wings in the south since the region is set to witness a major glut following plans by several cement makers to set up greenfield projects there. Greenfield cement projects are being taken up by a host of players including Larsen & Toubro, Zuari Agro, Vishaka Cement. EvenIndia Cements and Madras Cements are enhancing capacities, and the Aditya Birla group flagship Grasim Industries has announced plans to raise installed capacity of the just-acquired Dharani Cement to 0.83 million tonnes.

"In two years' time the installed capacity of the south-based cement plants will be in the region of 7.5 million tonnes, and there is not much prospect in setting up manufacturing facilities in the region," Singhvi said.

The cement industry has seen several acquisitions and efforts at takeovers in course of the last six months, as the worst recession yet in the industry's history showed no signs of a let-up. The takeover list has been headed by India Cements' buyout of Raasi Cement in the south, and Autoriders group recently made a bid for Saurashtra Cement, a move which is still hanging fire in the court. Grasim has taken over Dharani Cement, and is rumoured to be looking at the Bangurs-owned Digvijay Cements as a possible target. Gujarat Ambuja itself bought out Modi Cement recently,which it has since merged into itself.