Sell Grasim Industries

Grasim Ind.Stock market analyst Rajat K Bose has suggested the investors to sell Grasim Industries stock as there are full chances of a downward trend in this stock.

After opening strongly at Rs 3,590 against its last closure at Rs 3515.15 (7 Jan), the stock traded in a weak manner on yesterday (8 Jan), and marked its closure at Rs 3,400.60 after making a loss of Rs 114.55.

If the stock fell below Rs 3380, it may see more weakness. So the investors must sell the stock with a stop loss above 3440 for targets of Rs 3330 and Rs 3305.

Aditya Birla Group’s flagship company Grasim Industries has already announced, in Dec 2007, that it will sell its 53.63% stake in Shree Digvijay Cement Company (SDCC) to Portuguese cement company Cimpor for Rs 3.22 billion.

The company`s board of directors, which met on Dec. 04, 2007, approved the sale of 75,816,681 equity shares (representing 53.63%) of Digvijay Cement for a price of Rs 42.50 a share.

The acquisition will be done through Cimpor’s subsidiary, Cimpor Inversiones. On completion of the sale, Digvijay Cement will cease to be a subsidiary of the company.

The transaction is likely to be completed by March 2008. Cimpor Inversiones will make a public offer for a further 20% stake in Digvijay Cement.

The decision to divest its equity in Digvijay Cement is primarily intended to rationalize Grasim Industries` portfolio of plants.

Analyst Views: