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UltraTech Cement, India’s largest cement producer and a flagship company of the Aditya Birla Group, has announced its decision to acquire a 32.72% equity stake in India Cements.
The deal is valued at Rs 3,954 crore, with UltraTech agreeing to pay Rs 390 per share for the acquisition from the promoters and their associates.
The purchase will trigger a mandatory open offer at the same price, potentially increasing the total cost to Rs 7,100 crore if fully subscribed.
Previous stake acquisition
The announcement follows UltraTech's previous investment in June 2024, where it acquired a 22.77% equity stake in India Cements for Rs 1,889 crore at Rs 268 per share.
The earlier transaction involved purchasing shares from billionaire investor Radhakishan Damani and his associated entities.
“Post this financial investment, the promoter group approached us as they wanted to sell their holding in the company, and we found it appropriate to acquire their stake in the company," the company said.
India Cements' production capacity
India Cements has a total grey cement production capacity of 14.45 million tonnes per annum (MTPA), with 12.95 MTPA located in Tamil Nadu and 1.5 MTPA in Rajasthan.
The acquisition is expected to significantly enhance UltraTech’s capacity and market presence in the Southern region.
The deal is also expected to optimize or defer UltraTech’s existing expansion plans in the Southern market, considering the readily available assets of India Cements.
The company said that the completion of the transaction is subject to obtaining necessary regulatory approvals, with the entire process expected to conclude within six months.
UltraTech Cement said, “The open offer will be done subsequently after obtaining all regulatory approvals.”
The acquisition aims to solidify UltraTech’s position as a leading player in the cement industry, augmenting its existing capacity and accelerating its path to reaching over 200 MTPA capacity.
UltraTech’s current operational capacity stands at 149.5 MTPA in India and 154.9 MTPA overall, including overseas operations. The latest acquisition will place UltraTech significantly ahead of its closest rival, Adani Cement, which has an operational capacity of 77 MTPA as of March 2024.