UltraTech Cement to Acquire 32.72% Stake in the India Cements

UltraTech Cement Limited has announced a significant acquisition involving India Cements Limited, aiming to enhance its foothold in the competitive Southern cement market. On July 28, 2024, UltraTech signed three share purchase agreements (SPAs) to acquire a combined 32.72% stake in India Cements Limited.

The transaction details include the purchase of up to 6,81,20,424 equity shares, representing 21.98% of The India Cements’ equity, from promoters and members of the promoter group at a price of Rs. 390 per share. This part of the deal totals Rs. 2,656.70 crore. Another agreement involves acquiring 1,99,54,024 shares (6.44% stake) from the promoter group’s trustees for Rs. 778.21 crore. Additionally, UltraTech will buy 1,33,16,783 shares (4.30% stake) from Sri Saradha Logistics Private Limited for Rs. 519.35 crore.

The acquisition aligns with UltraTech's strategy to strengthen its presence in the Southern market, particularly Tamil Nadu, where it aims to address limitations due to restricted limestone availability. By acquiring ready-to-use assets, UltraTech intends to enhance operational efficiencies and potentially defer its existing capacity expansion plans.

Furthermore, an open offer will be made to acquire up to 8,05,73,273 equity shares, representing 26% of the total equity capital of The India Cements, from public shareholders at the same price of Rs. 390 per share. This open offer is part of the mandatory process following the substantial acquisition of shares.

The transaction, valued at approximately Rs. 3,954 crore, is subject to regulatory approvals from the Competition Commission of India. Upon completion, UltraTech will gain sole control over The India Cements and become its promoter, while existing promoters will be reclassified as public shareholders.

Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, "UltraTech Cement's investments over the years, both organic and inorganic, have been designed to propel India to become a building solutions champion globally. Every investment in a core sector like cement accelerates economic activity and drives progress. These investments have also facilitated India's nationwide infrastructure upgrade, powering our country's growing need for housing, roads, and other vital infrastructure. This, in turn, has had tremendous impact on the lives and aspirations of people."

UltraTech’s strategic move aims to bolster its presence in the fragmented cement market and enhance shareholder value, creating new employment opportunities and augmenting its only integrated cement unit in Tamil Nadu.

Ultra Tech Announcement Here

India Cement Open Offer Announcement Here 

UltraTech Cement 

UltraTech Cement is a major player in the global cement industry and a part of the Aditya Birla Group. As the largest producer of grey cement and ready-mix concrete in India, and one of the top white cement manufacturers, UltraTech has a total cement capacity of 154.86 million tonnes per annum.

It operates across India, UAE, Bahrain, and Sri Lanka, with a vast network of over 100,000 channel partners and 307 RMC plants. UltraTech is noted for its innovation in building solutions, including the UltraTech Building Solutions (UBS) for individual home builders.

Committed to sustainability, the company has ambitious environmental goals and engages in significant social initiatives benefiting over 1.6 million people across India.

India Cements

India Cements was founded in 1946 by S.N. Sankaralinga Iyer and T.S. Narayanaswami in Tamil Nadu, India. Starting with a small plant in 1949, it has grown significantly, now boasting a total cement capacity of 15.5 million tonnes per annum across 8 integrated plants and additional grinding units.

The company has expanded into related areas such as shipping, captive power, and coal mining, aiming to become a comprehensive pan-India player. Its journey reflects a vision of industrial growth and resilience in the face of supply chain challenges.