UltraTech Cement has made a significant financial investment in India Cements, acquiring a 22.77% equity stake at Rs 268 per share in June 2024. This investment will see UltraTech spending approximately Rs 7,000 crore to purchase Srinivasan’s stake and fund the mandatory open offer. India Cements has a total production capacity of 14.45 million tonnes per annum (mtpa), primarily located in the South of India and Rajasthan. Post-transaction, UltraTech will further invest Rs 3,954 crore to acquire an additional 32.72% stake from the promoters and their associates, triggering a mandatory open offer at Rs 390 per share. This strategic acquisition aims to strengthen UltraTech’s position in the Southern market and contribute to India’s infrastructure development.
5 Key Points
- Initial Investment: UltraTech acquired a 22.77% equity stake in India Cements at Rs 268 per share, costing around Rs 7,000 crore.
- Strategic Acquisition: Following the promoter group’s approach, UltraTech decided to acquire their stake, further investing Rs 3,954 crore for a 32.72% stake at Rs 390 per share.
- Production Capacity: India Cements has a total capacity of 14.45 mtpa, with 12.95 mtpa in the South (Tamil Nadu) and 1.5 mtpa in Rajasthan.
- Regulatory Approvals: The transaction is subject to regulatory approvals, and a mandatory open offer will follow, priced at Rs 390 per share.
- Economic Impact: UltraTech’s investments aim to bolster India’s infrastructure, supporting housing, roads, and other vital sectors, with a goal to reach a production capacity of over 200 mtpa.
