UltraTech Cement to acquire 23% stake in India Cement

28 Jun 2024 , 11:16 AM

On June 27, UltraTech Cement announced plans to acquire a 23% stake in India Cements, having already acquired 19.44% through morning block deals. UltraTech’s board approved the purchase of an additional 3.4% stake to reach their target acquisition.

UltraTech bought 6.02 Crore shares of India Cements at ₹267 per share and plans to purchase the remaining 1.04 Crore shares at up to ₹285 per share, with the total cost exceeding ₹1,900 Crore.

At the time of writing on June 28, 2024 at 10.44 am shares of Ultratech Cements were trading at ₹11,664 which is a 0.44% dip than the previous close. The stock has gained a total of 41% in the last one year, and 11% since the beginning of the year.

The promoter group owns 28.42% of India Cements, while investor Radhakishan Damani and his associates hold 20.78%. UltraTech expects to complete the acquisition within one month, with the transaction being conducted in cash.

Cement stocks have been rising, with Emkay Global reporting a 6-20% rally in the past month, driven by a stable government and infrastructure development expectations.

The cement industry has experienced a volume CAGR of 9-10% from FY21 to FY24, compared to a historical average of 5-6%. Emkay anticipates a steady demand CAGR of 7-8% in the coming years, despite potential demand softening in the first half of this fiscal year.