The country’s largest cement maker Ultratech has agreed to buy out the 32.74 percent stake held by the promoters of India Cements for Rs 3,954 crore or Rs 390/share on top of the recent 22.77 percent acquisition it had made in June in the company by acquiring the stake held by Radhakishan Damani of D-mart fame for Rs 1900 crore.
The additional purchase will lead to the total stake in the company to increase to 55.51 percent and will also lead to an open offer at a later state which the Birlas said will be made at Rs 390/share after the regulatory approvals.
Announcing the deal after a board meeting Sunday, Kumar Mangalam Birla, the chairman of the Aditya Birla Group, said, “the India Cements opportunity is an exciting one as it enables us to serve the Southern markets more effectively and also accelerates our path to over 200 million tonne annual capacity.”
Ultratech’s investments over the years, both organic and inorganic, have been designed to propel the country to become a building solutions champion globally, he added.
“After we made a financial investment in India Cements to acquire 22.77 percent equity (held by Damani at a price of Rs 268/share in June 2024 (aggregating to Rs 1,900 crore), the promoter group (led by N Srinivasan and family) has approached us as they wanted to sell their holding in the company, and we found it appropriate to acquire their stake in the company.
“Accordingly, we have agreed to pay Rs 3,954 crore at Rs 390/share for buying 32.72 percent stake in the company from the promoters and their associates,” the Ultratech said in a statement Sunday.
India Cements has a total capacity of 14.45 mtpa of grey cement. Of this, 12.95 mtpa are in the South (particularly Tamil Nadu) and 1.5 mtpa in Rajasthan.
The statement further said the transaction is subject to regulatory approvals.
“This share purchase agreement will trigger a mandatory open offer at Rs 390/share, which will be done subsequently after obtaining all regulatory approvals,” the statement added.
The $8.4 billion Ultratech Cement is the third largest cement producer in the world, outside of China, with a total grey cement capacity of 154.86 mt. It has 24 integrated manufacturing units, 33 grinding units, one clinkerisation unit and 8 bulk packaging terminals.
After the June deal Ultratech became the second largest shareholder in the India Cements, which has a manufacturing capacity of 16 mt, including 1.5 mt from its subsidiary Trinetra Cement. The 22.77 percent stakes were held by Gopikishan Shivkishan Damani, Kiran Devi Damani, Radhakishan Shivkishan Damani and Shrikanta Devi Damani.
In the past 12 months, Ultratech has expanded its capacity by 18.7 mt.
The deal came within two weeks after Adani Group, the second largest cement maker acquired the Hyderabad-based Penna Cement at an enterprise value of Rs 10,422 crore, which will add 14 mt, taking its capacity to 93 mt.
For the quarter ending March 2024, India Cements promoters hold 28.42 percent share, in which N Srinivasan, vice-chairman and managing director, holds 0.36 percent. EWS Finance & Investments, a promoter group firm, has a 21.56 percent stake in the company.
