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UltraTech Cement to Acquire 32.72% Stake in India Cements for ₹3,954 Crore

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Synopsis:

UltraTech Cement is set to acquire a 32.72% stake in India Cements for ₹3,954 crore, with an additional ₹3,142.35 crore open offer for 26% more shares. This acquisition is priced at ₹390 per share. This move strengthens UltraTech's position in South India.

UltraTech Cement- India Cement Acquisition

UltraTech Cement, the flagship company of the Aditya Birla Group, has announced plans to acquire a significant stake in India Cements, strengthening its presence in the competitive Southern Indian cement market.

Acquisition Details

UltraTech Cement will acquire a 32.72% stake in India Cements from promoters and their associates for ₹3,954 crore. This acquisition is priced at ₹390 per share and is expected to provide UltraTech with a competitive edge in the fast-growing Southern market, particularly in Tamil Nadu.

Open Offer for Additional Stake

In conjunction with the acquisition, UltraTech has launched an open offer worth ₹3,142.35 crore to acquire an additional 26% share of India Cements from its shareholders. This open offer is also priced at ₹390 per share, a 4.1% premium over India Cements' last closing price.

If fully subscribed, this would elevate UltraTech's stake in India Cements to over 55%, triggering the mandatory open offer as per SEBI regulations. The acquisition deal is subject to regulatory approvals from the Competition Commission of India and is expected to be completed within six months.

Competitive Landscape

This move by UltraTech comes on the heels of the Adani Group’s acquisition of Hyderabad-based Penna Cement for ₹10,422 crore, increasing Adani’s capacity to 93 million tonnes per annum (MTPA).

UltraTech Cement currently leads the Indian cement industry with an installed capacity of 154.86 MTPA and has ambitious plans to expand its capacity to 200 MTPA, aiming to become one of the largest cement companies globally.

The Adani Group, which entered the cement business in September 2022, targets achieving a 140 MTPA capacity by FY28.

Stock Performance

On Friday, India Cement share price closed at ₹372, whereas the Ultratech Cement stock closed at ₹11,664. These stocks have given a return of 42.37% and 11.47%, year-to-date, respectively. As a result of this announcement, India Cement and Ultratech Cement share prices will remain in focus today.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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