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UltraTech Cement Acquires Major Stake in India Cements

UltraTech Cement Expands Southern Market Presence

UltraTech Cement Limited has announced the acquisition of a significant 32.72% equity stake in India Cements Limited, solidifying its position in the Southern market. This strategic move involves multiple share purchase agreements with the promoters and members of the promoter group of India Cements.

Key Acquisition Details

Overview of the Acquisition

• Date of Agreement: 28th July 2024
• Stake Acquired: 32.72%
• Total Consideration: Rs. 3,954 crores
• Price per Share: Rs. 390

Specifics of the Share Purchase Agreements

SPA 1:

• Sellers: EWS Finance & Investments Private Limited, N. Srinivasan, Chitra Srinivasan, Rupa Gurunath, S.K. Asokh Baalaje
• Shares: 6,81,20,424 (21.98% of equity share capital)
• Consideration: Rs. 2,656.70 crores

SPA 2:

• Seller: Rupa Gurunath, Trustee of Financial Service Trust and Security Services Trust
• Shares: 1,99,54,024 (6.44% of equity share capital)
• Consideration: Rs. 778.21 crores

SPA 3:

• Seller: Sri Saradha Logistics Private Limited
• Shares: 1,33,16,783 (4.30% of equity share capital)
• Consideration: Rs. 519.35 crores

Open Offer

• Shares Offered: 8,05,73,273 (26% of equity share capital)
• Price per Share: Rs. 390

Strategic Benefits

Market Expansion

• Southern Market: The acquisition extends UltraTech’s footprint in the highly competitive Southern market, particularly in Tamil Nadu.
• Operational Efficiency: Acquiring ready-to-use assets reduces time to market compared to greenfield projects.
• Capacity Augmentation: Enhances value for shareholders and creates direct and indirect employment opportunities.

Industry Impact

• Cement Industry: India Cements has a total capacity of 14.45 MTPA, with 12.95 MTPA in the South and 1.5 MTPA in Rajasthan.
• Economic Activity: The investment in the core sector like cement accelerates economic activity and drives progress.

Leadership Insights

Kumar Mangalam Birla, Chairman, Aditya Birla Group:

"UltraTech Cement's investments over the years, both organic and inorganic, have been designed to propel India to become a building solutions champion globally. Every investment in a core sector like cement accelerates economic activity and drives progress. 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."

 

Image: Kumar Mangalam Birla, Chairman, Aditya Birla Group