UltraTech Cement acquires 51% stake in India Cements

29 Jul 2024 , 11:04 AM

UltraTech Cement’s board has approved the acquisition of a 28.42% stake from the promoters of India Cements. The acquisition involves buying N Srinivasan’s 28.42% stake in India Cements, increasing UltraTech’s total stake to 51%.

Aditya Birla Group’s UltraTech Cement will acquire a total 32.72% stake at ₹390 per share, amounting to ₹3,954 Crore. The 32.72% stake includes 28.42% from promoters and 4.3% from other associates.

UltraTech has announced an open offer for a 26% stake in India Cements at ₹390 per share, a 4% premium to the recent closing price. Both the primary acquisition and the open offer are expected to be completed within six months.

Kumar Mangalam Birla, Chairman of Aditya Birla Group, highlighted that this acquisition will enhance UltraTech’s ability to serve the Southern markets and accelerate its capacity to over 200 MTPA. Birla emphasized that UltraTech’s investments in the cement sector drive economic activity and progress, contributing to nationwide infrastructure upgrades.

UltraTech had previously bought a 22.77% stake in India Cements in June at ₹268 per share. The acquisition of the previous stake from Radhakrishna Damani cost around ₹1,885 Crore at an average price of ₹265 per share.

At the time of writing on July 29, 2024 at 11:01 am, shares of UltraTech Cement is currently trading at ₹11,762 which is a 0.77% gain than the previous close. UltraTech Cement stock has witnessed a total of 41% gain in the last one year, and 12% gain since the beginning of the year.

UltraTech is the largest cement player in India with a total capacity of 152.7 MTPA. Earlier in 2024, UltraTech acquired the cement business of Kesoram for an enterprise value of ₹7,600 Crore.

India Cements is a major player in South India, with a consolidated installed capacity of 15.5 MT, and is also involved in the shipping business. As of the June 2024 quarter, India Cements promoters held a 28.42% stake in the company.

UltraTech Cement Limited, headquartered in Mumbai, is an Indian multinational cement company. It stands as the largest manufacturer of grey cement, ready-mix concrete (RMC), and white cement in India, and ranks as the 5th largest globally. The company boasts an installed capacity of 152.70 million tonnes per annum and a sales volume of 119 million tonnes per annum.

UltraTech Cement’s journey began in 1983 as the cement division of Larsen & Toubro (L&T), marketed under the “L&T Cement” brand. In 2000, L&T decided to sell its cement business and created a wholly-owned subsidiary to manage the cement assets. This move marked the foundation of UltraTech Cement as a significant player in the industry.