ACC saw reverse action on Tuesday as the market moved into book profits on the counter after solid gains on Monday over the possibility of an open offer from Gujarat Ambuja.

The profit booking compelled the scrip of India's largest cement company lower by 2.56% to Rs 154.15 on BSE by 11:15 IST. It witnessed volumes of over 320,000 shares till then. This was a complete reversal of fortunes from yesterday's gain of 7.33% to Rs 158.20.

Yesterday's jump was the result of speculation that that market regulator Sebi may rule (next week) that it was mandatory for Gujarat Ambuja to make an open offer for an additional 20% stake in ACC. However, the initial euphoria fizzled out today as the market reckoned that even with a ruling, the open offer would take some time to materialise.

A Sebi investigation , in any case, is not likely to be completed in a short while as was the case with similar previous investigations into Colour-Chem and Rayban .

One dealer feels that ACC looks technically weak, prompting the offloading. However, he thinks the scrip will recover after the immediate correction .

Earlier, the Securities Appellate Tribunal ordered Sebi to take a re-look at the deal involving GACL's acquiring a 14.45% stake in ACC. In a statement on 25 October 2002, SAT said that Sebi had jumped to conclusions while stating that the acquisition of stake by GACL in ACC was not tantamount to a change in management control, and, therefore, did not trigger the Takeover code.

Earlier, Sebi had stated that the Tata group, despite having a 14.45% stake in ACC, did not exercise any control over the company. Therefore, the Tata group's sale of stake to GACL did not result in change in management control. However, a group of ACC shareholders moved SAT against the Sebi ruling.

SAT asked Sebi to conduct a fresh probe into the deal, saying the market regulator's earlier findings were not complete and adequate. SAT told Sebi to look into whether GACL is in a position to effect control over ACC (to look afresh as to whether the acquisition of 14.45% stake by GACL resulted in change in management control or not). If Sebi concludes that GACL has, in fact, acquired management control over ACC, GACL will have to make an open offer at Rs 370 per equity share plus interest for the last three years.

In 1999-2000, GACL had bought the Tata group's entire holding of 14.45% in ACC in three tranches at Rs 370 per share.

Yesterday's rise in ACC has also been attributed to reports that the company has offloaded its entire 19.5% stake in the tyre joint venture – Bridgestone ACC India – to Bridgestone Corporation for Rs 50 crore. The move is a part of the company's strategy to exit non-core businesses.

Meanwhile, in January 2003, ACC registered a 11.68% rise in cement dispatches to 1.19 million tonnes, from 1.07 million tonnes in the same month a year earlier. Production rose by 9.07% to 1.15 million tonnes, from 1.05 million tonnes a year ago. Cumulative production and dispatches figures for the period April to January 2003 were at 11.37 million and 11.36 million tonnes respectively.

Last month, ACC announced its third quarter (ended 31 December 2002) results. The company posted a 19.4% rise in net profit to Rs 20.21 crore, compared to Rs 16.93 crore in the corresponding period of the previous year. However, net sales declined by 3.06% to Rs 682.28 crore (Rs 6.82 billion) from Rs 703.86 crore (Rs 7.03 billion) in DQ 2001.

BSE code: 500410