UltraTech Cement, India’s largest cement manufacturer, has announced its decision to acquire an additional 32.72% stake in India Cements from its promoters and their associates for Rs 3,954 crore. This strategic move is set to bolster UltraTech’s leadership position in the cement sector and tighten its grip on the southern Indian market.
This acquisition is not only a significant expansion for UltraTech but also a defensive strategy against the Adani Group, which has shown interest in acquiring the south India-based cement firm. The transaction, valued at Rs 390 per share, will increase UltraTech’s stake in India Cements to 55.49%, triggering a mandatory open offer at the same price per share. The company plans to buy up to 80.5 million shares, or 26% of the equity, from public shareholders, amounting to approximately Rs 3,142.39 crore. Should the open offer be fully subscribed, the total acquisition cost will rise to Rs 7,100 crore. The open offer price represents a 4% premium over the closing price of Rs 374.60 on Friday. In a prior deal in June, UltraTech acquired a 22.7% stake in India Cements from the Radhakishan Damani Group for Rs 1,889 crore at Rs 268 per share. This earlier acquisition set the stage for the current expansion, with UltraTech now taking a more substantial ownership role following an approach by the promoter group seeking to sell their holdings.
Kumar Mangalam Birla, chairman of the Aditya Birla Group, highlighted the strategic importance of this acquisition. He emphasised that UltraTech’s investments aim to position India as a global leader in building solutions. The addition of India Cements is particularly valuable for enhancing UltraTech’s service capabilities in the highly competitive southern markets and accelerating the company’s path to achieving over 200 million tonnes per annum (MTPA) capacity. Currently, UltraTech has a consolidated grey cement capacity of 152.7 MTPA, spread across 24 integrated manufacturing units, 33 grinding units, one clinkerisation unit, and eight bulk packaging terminals. This acquisition adds another 14.5 MTPA capacity, significantly distancing UltraTech from its closest competitor, Adani Cement, which operates 77 MTPA as of March.
The acquisition is subject to regulatory approvals from the Competition Commission of India and other relevant authorities. India Cements, with a group capacity of 16 MTPA, including its subsidiary Trinetra Cement, will provide UltraTech with ready-to-use assets and potential optimisation opportunities for existing capacity expansion plans in the southern market. As UltraTech cements its dominance in the south, the company remains on track to achieve its ambitious target of 200 MTPA by 2028, well ahead of Adani’s 140 MTPA goal. This acquisition marks a significant milestone in UltraTech’s journey to becoming a building solutions champion, both in India and globally.
