Sagar Cements to Sell 7.24% Stake in Andhra Cements via OFS; Floor Price Set at ₹52

Sagar Cements has announced plans to sell a part of its stake in its subsidiary Andhra Cements through the Offer for Sale (OFS) route. The decision was approved by the investment committee of the company’s board during a meeting held on March 16, 2026. This move will allow investors to purchase shares of Andhra Cements directly through the stock exchanges.

As part of the transaction, Sagar Cements plans to sell 66,76,843 equity shares, representing 7.24% of the total issued equity share capital of Andhra Cements. Each share carries a face value of ₹10. The stake sale is aimed at partially reducing the company’s holding in the subsidiary while allowing market participants to acquire shares through a transparent exchange-based mechanism.

The OFS will be conducted over a two-day bidding process. The first day of bidding, March 17, 2026, will be open exclusively to non-retail investors, which include institutional investors such as mutual funds, insurance companies, and other large market participants. On the second day, March 18, 2026, retail investors will be allowed to place bids for shares in the offer. This two-phase structure is commonly used in OFS transactions to ensure fair participation from both institutional and retail investors.

Sagar Cements has set the floor price at ₹52 per share for the stake sale. This means investors must place bids at ₹52 or higher if they wish to participate in the OFS. The final allocation price will depend on the demand received during the bidding process. Shares will be allotted based on price priority, meaning higher bids will get preference during allocation. The OFS will be settled at multiple clearing prices in accordance with stock exchange guidelines.

Retail investors will also have a specific allocation in the offer. According to the company’s announcement, 10% of the total shares offered in the OFS will be reserved for retail investors. Individuals can apply for shares with bids worth up to ₹2 lakh across the stock exchanges. The remaining shares will be allocated to institutional and non-retail participants based on the bidding process.

Following the announcement, the stock market reacted positively to the news. Shares of Andhra Cements witnessed strong buying interest and rose more than 9% in early trading on the National Stock Exchange (NSE). Investors appeared optimistic about the development, possibly viewing the OFS as an opportunity to acquire shares in the company at the floor price set by the promoter.

Meanwhile, shares of Sagar Cements also saw a mild upward movement after the announcement. The stock was trading around 0.23% higher, reflecting a relatively neutral but stable investor reaction. In the previous trading session before the announcement, the company’s shares had closed slightly lower at ₹175.99, declining about 0.09%.

Offer for Sale transactions are commonly used by promoters and large shareholders to reduce their stake in a company in a transparent and efficient manner. The OFS mechanism allows shares to be sold directly through stock exchanges within a short bidding window, ensuring price discovery based on investor demand. It also helps improve liquidity in the stock and increases public shareholding.

For Andhra Cements, the OFS may help broaden its investor base as more institutional and retail investors gain exposure to the company’s shares. At the same time, Sagar Cements will still remain a significant shareholder in the subsidiary even after the stake sale.

Overall, the planned sale of 7.24% stake in Andhra Cements through the OFS route represents a strategic move by Sagar Cements to unlock value and improve market participation in its subsidiary’s stock. Investors will now closely watch the bidding response during the offer window to see how the market values the shares and what level of demand emerges during the two-day sale process.