UltraTech Cement to Acquire 23% Stake in India Cements for Rs 1,885 Crore

In a significant move within the Indian cement industry, UltraTech Cement announced on Thursday that its board has approved the acquisition of a 23% stake in India Cements. The deal, valued at approximately Rs 1,885 crore, will be executed at Rs 267 per share.

“The Board of Directors of the Company at its meeting held today approved making a financial investment to purchase up to 7.06 crore equity shares of The India Cements Limited (ICL) at a price of up to Rs 267 per share. This non-controlling financial investment constitutes around 23% of the equity share capital of ICL,” UltraTech stated in a regulatory filing.

Strategic Financial Investment

UltraTech Cement, part of the Aditya Birla Group, described the transaction as a financial investment. The purchase will be made through a cash payment, signaling confidence in the growth prospects of India Cements. The move is seen as a strategic step to strengthen UltraTech’s position in the cement industry without gaining control over India Cements.

Market Reaction

The announcement had an immediate positive impact on the stock market. UltraTech Cement’s shares surged by 6%, reaching Rs 11,811. Meanwhile, shares of India Cements also saw a significant rise of 12.5%, closing at Rs 295.75.

Industry Implications

This investment highlights the ongoing consolidation and strategic partnerships within the Indian cement sector. With increasing demand for construction and infrastructure development, such investments are expected to drive growth and efficiency in the industry.

Conclusion

The acquisition by UltraTech Cement is a testament to the dynamic nature of the cement industry in India. As companies seek to optimize their portfolios and capitalize on market opportunities, strategic investments like this are likely to become more common. Stakeholders will be closely watching the developments following this significant financial move by UltraTech Cement