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UltraTech Cement Board OKs India Cements Acquisition

Jul 29, 2024

By: BlinkX Research Team

On Sunday, July 28 UltraTech Cement said that its board has approved the purchase of a 32.72% equity stake of the promoters and their associates in India Cements.



Key Takeaways from UltraTech Cement Nod on India Cement Acquisition

• UltraTech Cement board has approved the purchase of a 32.72% equity stake of the promoters and their associates in India Cements.
• UltraTech Cement would now own a 55.49% interest in India Cements, making it the largest stakeholder.
• Upon signing the SPA and securing regulatory permissions, UltraTech would pay Rs 3,954 crore at Rs 390 per share to acquire a 32.72% interest in India Cements from the promoters and their partners. 
• The open offer price is 4.1% more than the closing price of India Cements shares, which was Rs 374.60 per last Friday. 

With the latest announcement, UltraTech Cement would own a 55.49% interest in India Cements, making it the largest stakeholder.

In June 2024, UltraTech Cement invested money in India Cements, paying Rs 268 per share to purchase 22.77% of the company. 

‘Post this financial investment, the promoter group approached us as they wanted to sell their holding in the company, and we found it appropriate to acquire their stake in the company,’ the Aditya Birla Group company stated in an exchange filing on Sunday.

Upon signing the SPA and securing regulatory permissions, UltraTech would pay Rs 3,954 crore at Rs 390 per share to acquire a 32.72% interest in India Cements from the promoters and their partners. This will trigger a mandated open offer at Rs 390 per share. The open offer will take place when all regulatory permissions have been obtained.

The open offer price is 4.1% more than the closing price of India Cements shares, which was Rs 374.60 per last Friday. 

Aditya Birla Group Chairman, Kumar Mangalam Birla 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.”

“The India Cements opportunity is an exciting one as it enables UltraTech to serve the Southern markets more effectively and also accelerates our path to 200+ MTPA capacity”, Birla added.

The cement major's consolidated net profit increased slightly to Rs 1,696.59 crore in QI FY25, compared to Rs 1,688.45 crore in QI FY24. Its operating revenue increased by 1.87% year-on-year (YoY) to Rs 18,069.56 crore in the quarter ended June 30, 2024.

About UltraTech Cement Limited

UltraTech Cement Limited is an Indian company that was founded in 1983 and is primarily involved in the production and retailing of cement and associated goods. It provides Ready-Mix Concrete (RMC), Portland Slag Cement (PSC), Portland Pozzolana Cement (PPC), Composite Cement (CC), and Ordinary Portland Cement (OPC). 

Birla White Cement, White Topping Concrete, UltraTech Cement, UltraTech Concrete, and UltraTech Building goods are among the goods offered by the company. Tile adhesives, waterproofing materials, repair products (MICROKRETE and BASEKRETE), precision and industrial grout, plasters (READIPLAST, SUPER STUCCO), masonry products (FIXOBLOCK) and lightweight autoclaved aerated concrete blocks are all part of its UltraTech Building product line. 

The company offers industrial grout for machine foundation, connecting of precast elements, high performance safety vaults, and tile adhesive polymer under TILE FIXO. It also supplies waterproofing materials for kitchen balconies, slope roofs, bathrooms, canal linings, swimming pools, and water tanks. 

About India Cements Limited

India Cements Limited incorporated in 1946, is an Indian firm that manufactures and markets cement and associated goods. Its brands include Sankar Super Power, Coromandel King, and Raasi Gold. Its specialised cements include Coromandel SRPC, Coromandel Sleeper Cement, and Coromandel Oil Well Cement. Its related products include Coromandel White and Coromandel Super Wall Putty.

The Company's plants are spread across India, including Sankarnagar, Sankari, Dalavoi, Vallur Village, Parli Vaijnath, Nokhla, Chilamkur, Yerraguntla, Vishnupuram, and Malkapur. The company's subsidiaries include Coromandel Electric Company Limited, Coromandel Travels Limited, Industrial Chemicals and Monomers Limited, and others. Its subsidiaries and partner enterprises primarily operate in the sugar, electricity, financial services, trade, mining, and transportation sectors.

Read More About UltraTech Cement Share Price Here!