UltraTech to Acquire Additional 32.72% Stake in India Cements
UltraTech has announced plans to purchase an additional 32.72% share in ICL from the South-based company's promoters.
Leading cement manufacturer UltraTech has announced plans to acquire an additional 32.72% stake in India Cements Ltd (ICL) from the promoters of the South-based company for ₹3,954 crore. This strategic move will significantly increase UltraTech’s presence in the Southern Indian market.
The Aditya Birla Group’s UltraTech board approved the acquisition of the promoters’ 32.72% stake at ₹390 per share, as per a regulatory filing on Sunday. UltraTech has entered into three share purchase agreements to acquire this stake from the promoter family, led by Srinivasan N and Gurunath, as well as holding entities.
Impact of the UltraTech Acquisition:
Upon completing the ₹3,954 crore deal, UltraTech’s total stake in India Cements will exceed 55%, triggering a mandatory open offer as required by the Securities and Exchange Board of India (SEBI) regulations. UltraTech has also announced an open offer for up to 8.05 crore equity shares, representing 26% of ICL’s equity share capital, at a price of ₹390 per share, which is 4.1% higher than ICL’s closing price of ₹374.60 on the previous Friday.
Previous Acquisitions and Strategic Goals:
In June, UltraTech acquired a 23% stake in ICL, including shares from the Damani group through two block deals valued at approximately ₹1,900 crore. This latest acquisition is part of UltraTech’s strategy to expand its imprint in the highly fragmented and competitive Southern market, particularly in Tamil Nadu, where it currently has a limited presence.
The primary acquisition is subject to statutory and regulatory clearances from the Competition Commission of India and other relevant authorities. Aditya Birla Group Chairman Kumar Mangalam Birla expressed enthusiasm for the opportunity, noting that it allows UltraTech to serve the Southern markets more effectively and accelerates the company’s path to achieving over 200 million tonnes per annum (MTPA) capacity.
UltraTech Capacity and Industry Impact
UltraTech has a consolidated capacity of 152.7 MTPA of grey cement, with 24 integrated manufacturing units, 33 grinding units, one clinkerisation unit, and 8 bulk packaging terminals. The company’s capacity has grown significantly, from 100 MTPA to 150 MTPA in less than five years, with an investment of around ₹32,000 crore.
In the last AGM in 2023, Birla set a target of 200 MTPA to position UltraTech as one of the largest cement companies globally. The company’s investments aim to bolster India’s infrastructure and housing needs, contributing to the country’s economic development and progress.
