UltraTech Cement Limited, Board of Directors approved the acquisition of a 32.72% equity stake in India Cements Limited from the promoters and their associates. This is in addition to their earlier purchase of a 22.77% stake in June 2024.
The acquisition, valued at Rs 3954 crores for the 32.72% equity at Rs 390 per share, is contingent upon receiving regulatory approvals and will trigger a mandatory open offer at the same price.
Key Points:
- Acquisition: UltraTech Cement to acquire 32.72% equity stake in India Cements.
- Previous Investment: UltraTech had previously bought a 22.77% stake in June 2024 at Rs 268 per share.
- Total Stake: After this deal, UltraTech’s stake in India Cements will increase significantly.
- India Cements Capacity: India Cements has a total grey cement capacity of 14.45 mtpa (million tonnes per annum).
Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, “The India Cements opportunity is an exciting one as it enables UltraTech to serve the Southern markets more effectively and also accelerates our path to 200+ MTPA capacity”
UltraTech Cement to hold a major stake in India Cements
Now UltraTech Cement will hold a 55.49% equity stake in India Cements. This is considered a controlling stake, as it surpasses the 50% threshold. It allows UltraTech Cement to have significant influence and control over the decision-making and operations of India Cements.
The share purchase agreements between UltraTech Cement and India Cements stipulate that there will be no immediate changes in the management of India Cements until the acquisition process is fully completed. This means the existing management team of India Cements will continue to operate the company during this transitional period.
The acquisition of India Cements is a significant step for UltraTech Cement’s expansion in the Southern Indian market, where India Cements has a strong presence.
This move allows UltraTech to leverage India Cements’ existing infrastructure and distribution network to strengthen its foothold in the region.
This is a major development in the Indian cement industry, consolidating UltraTech Cement’s position as a dominant player and expanding its presence in Southern India.