UltraTech Acquires 32.7% Stake in India Cements for ₹3,945 Crore

UltraTech Cement, a flagship of the Aditya Birla Group, will acquire a 32.72% equity stake in India Cements for ₹3,945 crore. The acquisition will be finalized through a Share Purchase Agreement with the promoters of India Cements, led by N. Srinivasan, pending regulatory approvals. UltraTech plans to make an open offer to India Cements shareholders at ₹390 per share after securing these approvals.

Previous Investments

In June, UltraTech had already invested in India Cements by purchasing a 22.77% stake at ₹268 per share. This strategic move was followed by the promoter group’s decision to sell their holdings, prompting UltraTech’s decision to increase its stake.

Capacity and Market Impact

India Cements operates with a grey cement capacity of 14.45 MTPA, primarily concentrated in Tamil Nadu (12.95 MTPA) and Rajasthan (1.5 MTPA). The acquisition will enhance UltraTech’s presence in the Southern markets and support its goal of surpassing 200 MTPA in total capacity. UltraTech is currently the third-largest cement producer globally, excluding China, with a total grey cement capacity of 154.86 MTPA.

Recent Developments

Financial Performance

India Cements reported a net loss of ₹61 crore for the March quarter, an improvement from a ₹244 crore loss the previous year. Its income fell to ₹1,287 crore from ₹1,494 crore.

Earlier Acquisitions

In April, UltraTech acquired a 1.1 MTPA grinding unit in Maharashtra from India Cements for ₹315 crore. Last November, it acquired Kesoram Industries’ 10.75 MTPA cement business in a share-swap deal valued at ₹7,600 crore, including Kesoram’s debt.

Competitive Landscape

This acquisition comes amidst intense competition in the cement sector, with UltraTech and Adani Group companies, Ambuja Cement and ACC, vying for market dominance.