UltraTech: Birla’s UltraTech buys 23% in India Cements in mkt share race with Adani cos

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MUMBAI/CHENNAI: UltraTech Cement, managed by Kumar Mangalam Birla, has acquired a 23% stake in India Cements from veteran investor Radhakishan Damani for Rs 1,885 crore. The transfer intensifies UltraTech’s rivalry with Gautam Adani’s Ambuja Cements and ACC as each search to problem its place as India’s largest constructing supplies maker. The transaction positions Birla because the second-largest shareholder of the Chennai-based India Cements, behind the founders, N Srinivasan and household, who maintain 28%.
UltraTech, the world’s third-most-valued cement firm, described the deal as a “non-controlling financial investment”, buying shares at Rs 267 every — a 9% low cost to the inventory’s Thursday closing value on BSE.
The 23% stake, which doesn’t embody a board place in India Cements, is a bit of shy of the edge requiring an acquirer to make an open provide to public shareholders beneath the nation’s takeover code. Despite Srinivasan and household proudly owning 28% in India Cements, 46% of that’s pledged, based on the corporate’s filings with the inventory exchanges.
This transaction marks the exit of Damani, who can be the founding father of retail chain DMart, from India Cements, the place he first invested in fiscal 2020. Over the years, he had elevated his stake to 22.8% from a bit of over 1.3%.
Bulk deal disclosures on BSE confirmed that Damani, his brother Gopikishan, and three associated associates offloaded their whole stake.

Former Ambuja Cements CEO and founding father of advisory agency I can Investment Anil Singhvi views the deal as a “preventive and proactive strategy” by UltraTech. “It is like a toe in the door and wait until the door opens,” Singhvi stated, including that “this is a good deal for the sellers as they were stuck in this for a long time and have got a reasonably good value and complete exit.”
The transaction values India Cements, which has a capability of 14.5 million tonnes, at Rs 10,800 crore. Industry analysts consider that this funding may very well be a prelude to UltraTech, a part of the Aditya Birla conglomerate, probably rising its stake and finally changing India Cements right into a strategic asset. The India Cements funding and the Kesoram acquisition will assist UltraTech guard its turf in the southern area, particularly because the Ambuja-ACC mix makes an attempt to ramp up its presence there. A couple of weeks in the past, Ambuja-ACC purchased Penna Cement, looking for to strengthen its southern grip.
The UltraTech funding comes at a time when India Cements is dealing with tough climate. In latest quarters, it has struggled to fulfill its working capital wants. Despite narrowing its losses, it has determined to promote sure belongings to boost funds. In April, India Cements offered its grinding unit in Maharashtra to UltraTech for Rs 315 crore.
Under Birla’s management, UltraTech has turn into India’s largest cement participant with a capability of 153 million tonnes. When he took over as chairman of the Adi tya Birla Group in 1995, the cement unit’s capability was lower than 5 million tonnes. The sector, anticipated to double to $49 billion by 2029 from 2022 ranges, has lengthy been dominated by UltraTech till Adani entered the market by buying Ambuja-ACC in 2022, making him the nation’s second-largest participant. Ambuja ACC at the moment has a capability of 89 million tonnes after expansions and acquisitions of smaller belongings.
In a June 13 word, scores company ICRA stated it expects mergers and acquisitions to proceed in the sector, given the aggressive growth plans of huge incumbent gamers who wish to keep their market shares. Broking agency Emkay stated Thursday that it sees a minimum of 40-50 million tonnes of cement capability altering palms over the following few years.


Nilesh Desai
Nilesh Desaihttps://www.TheNileshDesai.com
The Hindu Patrika is founded in 2016 by Mr. Nilesh Desai. This website is providing news and information mainly related to Hinduism. We appreciate if you send News, information or suggestion.

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