UltraTech acquired a 23% stake in India Cements

4 Jul 2024 , 10:17 AM

UltraTech Cement has bought a 23% stake in India Cements for around ₹1,900 Crore, putting an end to potential future bids for the leading peninsular manufacturer as the race to control capacities intensifies in a highly regionalised and freight-intensive cement industry that is the world’s second largest after China.

UltraTech, the largest cement maker in the country and part of the Aditya Birla Group, purchased 70.6 million shares of India Cements as a “non-controlling financial investment” for up to ₹267 per share, the acquirer said in customary filings Thursday morning.

UltraTech acquired the shares from Derive Investments and Derive Trading and Resorts.

UltraTech already has a capacity of over 150 million tonnes in the world’s second-largest cement producer and consumer. It aims to have a production capacity of 200 million tonnes by March 2027.

It currently holds a 23-24% market share in India, having built more than 50 million tonnes of capacity in five years, with 19 million tonnes added in a single year.

While India’s southern markets account for one-third of total cement production, UltraTech’s presence in the region is much lower than elsewhere in the country. Last year, the firm announced the acquisition of Kesoram Industries’ cement division, with a capacity of 10.75 million tonnes, as well as two integrated manufacturing sites in Telangana and Karnataka.

UltraTech is trying to strengthen its footing in the south by investing in India Cements, a seven-decade-old company with a capacity of roughly 13 million tonnes and operations in Tamil Nadu, Andhra Pradesh, and Telangana.

Promoter N Srinivasan and his family own a 28.42% stake in India Cements, albeit some of those shares are pledged.

Damani initially acquired a 1.35% stake in India Cements in the September 2019 quarter, increasing it to 19.89% at the end of March 2020. He boosted his shareholding to 20.4% in July 2020. Damani grew his share to 21.14% in January 2021, then to 22.76% by December 2021.

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