Grasim Industries rose to its 52-week high of Rs 414 today and turned out the biggest gainer on the Sensex so far.

After hitting a high, the stock eased to Rs 412.50, up 6.19% over its yesterday's close, by 12:25 IST. Over 2.5 lakh Grasim shares were traded on BSE till then. Grasim Industries has now risen 47% from Rs 240 (its 52-week low) on 17 December 2002.

The rise in the stock of the AV Birla group cement and VSF maker, Grasim Industries, comes mainly on reports that the company is close to taking over the cement division of L&T.

Grasim Industries had earlier upped its stake in the cement, engineering and constructuion conglomerate to over 16% in a series of creeping acquisitions. The company has now raised its offer price for L&T's cement division to Rs 170 per share.

With the new offer price, Grasim has valued L&T's cement division at $76 per tonne. The earlier valuation was Rs 130 per share or $65 per tonne.

An earlier evaluation by a leading consulting firm had in fact put L&T's cement division's valuation at Rs 240 per share. If Grasim acquires L&T's cement division, it will automatically become the largest cement producer in the country. In addition, Grasim Industries' reach will widen as L&T is dominant in the southern and eastern regions of India, while Grasim has a foothold in the west. The negotiation power of the company in terms of price fixation will also increase.

In the cement business, Grasim's acquisition of a stake in L&T is seen as a key development. After acquiring a 10% stake in L&T from Reliance last year, Grasim had mopped up further shares from the open market, raising its stake to over 16%.

The Securities and Exchange Board of India (Sebi) had recently absolved the company over the issue of acquiring management control over L&T. That was followed by Grasim's announcing an open offer at the original price of Rs 190 per share for L&T, but the company received poor response in the offer.

Meanwhile, L&T's board is meeting today (17 June 2003) to consider Grasim's new offer.

For Q4 ended 31 March 2003, Grasim posted a net profit of Rs 49 lakh compared to a net profit of Rs 79.23 crore. Total income increased by 8.3% to Rs 1,267.06 crore from Rs 1,169.86 crore. For FY 2002-03, net profit jumped by 21.3% to Rs 367.58 crore from Rs 302.96 crore. Total income grew by 5.3% to Rs 4,742.13 crore from Rs 4,501.26 crore.

Grasim recently said that its outlook is bright with all its major businesses contributing to the improved performance. The company has started focusing on operational excellence, cost optimisation, effective financial management, continuous restructuring of business processes etc.