UltraTech Cement to acquire 23% stake in Chennai-based rival India Cements for over Rs 1,900 crore in two tranches

New Delhi: The country’s leading cement maker UltraTech on Thursday said it will acquire a 23 per cent stake in its Chennai-based rival India Cements Ltd for over Rs 1,900 crore in two tranches.

As part of the transaction, UltraTech Cement has acquired 6,02,48,983 equity shares of India Cements, aggregating to 19.44 per cent stake at a price of up to Rs 267 per share, the Aditya Birla Group flagship firm said in a regulatory filing.

The value of the first transaction at the share price of Rs 267 per share is pegged at Rs 1,608.64 crore.

The board of directors at a separate meeting approved acquiring up to 3.4 per cent equity shares at a price up to Rs 285 per share, it added. The value of the second transaction is Rs 295 crore at a price of up to Rs 285 per share.

Earlier in the day, UltraTech Cement in a regulatory filing said its board at a meeting held on Thursday approved “making a financial investment to purchase up to 7.06 crores equity shares of India Cements Ltd”.

“This non-controlling financial investment constitutes around 23 per cent of the equity share capital of India Cements,” UltraTech Cement said.

For the quarter ending March 31, 2024, India Cements promoters hold 28.42 per cent share in which N Srinivasan, Vice Chairman and Managing Director hold 0.36 per cent of the company. EWS Finance & Investments, a promoter group firm, holds 21.56 per cent stake in the company.

UltraTech Cement with an installed capacity of 152.7 Million Tonnes Per Annum (MTPA) of grey cement, is in expansion mode. On April 20, it announced the acquisition of a grinding unit from India Cements in Maharashtra for a consideration of Rs 315 crore.

Earlier this week, UltraTech Cement also announced a revision of its offer to acquire 25 per cent in UAE-based RAK Cement Co for White Cement and Construction Materials PSC (RAKWCT).

In the last 12 months, UltraTech has expanded its capacity by 18.7 MTPA.

“The ongoing expansion of 35.5 MTPA is actively being implemented across 16 locations. In addition, the company is in the process of closing the proposed acquisition of Kesoram Cement. This will further augment UltraTech’s grey cement capacity to 198.2 MTPA,” the company had said in a statement in April this year.

UltraTech Cement in April this year had announced a capex of Rs 32,400 crore (nearly USD 4 billion) over the next three years. Meanwhile, India Cements’ revenue from operations for the financial year ended on March 31, 2024 stood at Rs 5,112.24 crore. It has also reported widening of loss to Rs 227.34 crore, from Rs 126.89 crore in FY23.