23% stake in India Cements acquired by UltraTech
Cement

23% stake in India Cements acquired by UltraTech

In an increasing struggle for control over capacities in the highly regionalized and freight-intensive cement industry, UltraTech Cement has purchased a 23% stake in India Cements for approximately Rs 19 billion, stifling any further bids for the top peninsular producer. The cement industry is the second-largest in the world, behind China. The largest cement manufacturer in the nation, UltraTech, part of the Aditya Birla Group, purchased 70.6 million shares of India Cements as a "non-controlling financial investment" for a price as high as Rs 267 a share, according to the acquirer's regular disclosures on Thursday morning. Billionaire investor Radhakishan Damani, his family, and his investment companies, Derive Investments and Derive Trading and Resorts, sold their stakes to UltraTech. Manish Valecha, a research analyst at Anand Rathi Institutional Equities, mentioned that UltraTech had blocked the capacity of almost 15 million tonnes by investing Rs 1,900 crore. He noted that, as a result, UltraTech was now ahead in the race in terms of additions. Regarding the open offer, Valecha commented that regardless of whether it occurred now or later, the 15 million tonnes would not be available to anyone else.

Valecha pointed out that this move by UltraTech followed the announcement of Adani Cement's acquisition of south-based Penna Industries, which had a capacity of 14 million tonnes. Additionally, he noted that Adani Cement and JSW Cement were also contenders for Damani's stake in India Cements.

UltraTech, which currently holds a 23-24% market share in India, aims to increase its production capacity to 200 million tonnes by March 2027. The company has already added more than 50 million tonnes of capacity in five years, with 19 million tonnes added in just one year.

While the southern markets of India contribute a third of the country's total cement production, UltraTech's presence in this region was previously lower compared to other parts of the country. The acquisition of Kesoram Industries' cement division last year, with a capacity of 10.75 million tonnes and manufacturing units in Telangana and Karnataka, was part of UltraTech's strategy to strengthen its foothold in the south.

UltraTech's investment in India Cements, a major player in south India with a capacity of approximately 13 million tonnes and operations across Tamil Nadu, Andhra Pradesh, and Telangana, further underscores its commitment to expanding in this region. N. Srinivasan and his family own a 28.42% stake in India Cements, with a portion of those shares pledged. Damani's stake in India Cements has increased gradually since September 2019, reaching 22.76% by December 2021.

In an increasing struggle for control over capacities in the highly regionalized and freight-intensive cement industry, UltraTech Cement has purchased a 23% stake in India Cements for approximately Rs 19 billion, stifling any further bids for the top peninsular producer. The cement industry is the second-largest in the world, behind China. The largest cement manufacturer in the nation, UltraTech, part of the Aditya Birla Group, purchased 70.6 million shares of India Cements as a non-controlling financial investment for a price as high as Rs 267 a share, according to the acquirer's regular disclosures on Thursday morning. Billionaire investor Radhakishan Damani, his family, and his investment companies, Derive Investments and Derive Trading and Resorts, sold their stakes to UltraTech. Manish Valecha, a research analyst at Anand Rathi Institutional Equities, mentioned that UltraTech had blocked the capacity of almost 15 million tonnes by investing Rs 1,900 crore. He noted that, as a result, UltraTech was now ahead in the race in terms of additions. Regarding the open offer, Valecha commented that regardless of whether it occurred now or later, the 15 million tonnes would not be available to anyone else. Valecha pointed out that this move by UltraTech followed the announcement of Adani Cement's acquisition of south-based Penna Industries, which had a capacity of 14 million tonnes. Additionally, he noted that Adani Cement and JSW Cement were also contenders for Damani's stake in India Cements. UltraTech, which currently holds a 23-24% market share in India, aims to increase its production capacity to 200 million tonnes by March 2027. The company has already added more than 50 million tonnes of capacity in five years, with 19 million tonnes added in just one year. While the southern markets of India contribute a third of the country's total cement production, UltraTech's presence in this region was previously lower compared to other parts of the country. The acquisition of Kesoram Industries' cement division last year, with a capacity of 10.75 million tonnes and manufacturing units in Telangana and Karnataka, was part of UltraTech's strategy to strengthen its foothold in the south. UltraTech's investment in India Cements, a major player in south India with a capacity of approximately 13 million tonnes and operations across Tamil Nadu, Andhra Pradesh, and Telangana, further underscores its commitment to expanding in this region. N. Srinivasan and his family own a 28.42% stake in India Cements, with a portion of those shares pledged. Damani's stake in India Cements has increased gradually since September 2019, reaching 22.76% by December 2021.

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