Against the offer price of Rs 15, the India Cement's scrip on BSE is currently hovering around Rs 44.90, close to its all-time low. The premium of Rs 15 will be more attractive once the share starts moving northward from its current bottom. India Cements is offering 6.43 crore equity shares to its shareholders in the ratio of one share for every two shares held in the company. The company is tapping the shareholders mainly to fund the takeover of Raasi Cement.

The company had earlier obtained its shareholders' nod for raising equity through rights issue and Rs 50 crore as preference capital. The company has decided to increase the rights issue amount to Rs 160 croreand the entire amount will be raised through equity.

India Cement has appointed DSP Merrill Lynch as lead manger to the issue. The company is paying more than Rs 390 crore for acquiring Raasi Cement. Besides the rights issue, the balance funds will be raised through placement of shares, a preference issue of Rs 50 crore and internal accruals.

With the takeover of Raasi Cement, the total capacity of India Cement will be 7.5 million tonne, making it the largest cement manufacturer in the south and will have a market share of 30 per cent in the area. The country's total capacity is estimated at 96 million tonnes per annum. India Cements is also in the process of finalising various merchant bankers for private placement of its shares to the tune of Rs 50 crore.

India Cement had initially acquired a stake of 9.75 per cent in Raasi Cement in 1997 and had been a passive shareholder in RCL for a while. In February, 1998, ICL took advantage of the dissent between Raju and his son-in-law, NKP Raju, and acquiredthe latter's 8.28 per cent stake in RCL. Subsequently, through a hostile takeover bid the company has now gained the full control of Raasi Cement.