The consortium has offered to pay more than Rs 6,300 crore for Binani, while UltraTech Cement came a close second with its bid of Rs 6,100 crore, they said. The Dalmia-Bain Piramal offer is a combination of cash and equity with the latter forming a small portion of the total value. However, UltraTech Cement would score higher in the technical and management qualification, experts said.
On the other hand, lenders’ concerns regarding the Competition Commission of India (CCI potentially red-flagging concentration of UltraTech’s market share in the Gujarat market could play a role in deciding the winning bid, they said.
The 6.25 million tonne Binani Cement has a presence in Rajasthan, a location that will give Dalmia entry into the northern and western markets. It currently has a strong presence in Tamil Nadu and Andhra Pradesh in the south. Another aspect that makes the cement company attractive is its limestone reserves of 378 million tonnes, a key raw material in cement manufacturing. Dalmia Bharat has a capacity of 9 MTPA.
This was also one of the assets that underwent a second round of bidding after lenders’ estimate of its liabilities changed. In the first round, Sajjan Jindal-led JSW Cement had emerged as the highest bidder with an offer of Rs 5,900 crore. The bid deadline for the asset ended on February 12 and a decision by the committee of creditors (CoC) is likely to be made in a few weeks.
Binani owes about Rs 3,884 crore to lenders, which includes loans acquired by Edelweiss Asset Reconstruction Co. from banks and dues to State Bank of India, Canara Bank and Bank of Baroda.