UltraTech: On Thursday, UltraTech Cement announced it will acquire a 23% stake in Chennai-based India Cements (ICL). The Aditya Birla Group-owned company plans to purchase 70.6 million shares of India Cements at a price of up to Rs 267 per share, totaling Rs 1,885 crore.
The board of directors approved a financial investment to purchase up to 7.06 crore equity shares of The India Cements at a price of up to Rs 267 per share, UltraTech said in a statement. This non-controlling financial investment will constitute around 23% of ICL’s equity share capital. The indicative period for completing the deal is one month.
Shares of UltraTech, India’s largest cement company, surged by 6% to reach a new high of Rs 11,811. As of 10:15 am, the company’s stock was trading 4% higher at Rs 11,614. Meanwhile, shares of India Cements also saw a significant rise, climbing by 9% to Rs 288. This increase follows UltraTech’s announcement of acquiring a 23% stake in India Cements, reflecting positive market sentiment towards the strategic investment. Investors are closely watching these developments amid heightened interest in the cement sector.
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India Cements has a cement capacity of 14.45 million tonnes per annum, primarily serving the South Indian markets. At Rs 267 per share, UltraTech’s equity investment translates to approximately $85 per tonne on an enterprise value per tonne basis,” commented an industry analyst. The Chennai-based company reported a turnover of Rs 5,112 crore in the fiscal year 2023-24, compared to Rs 5,608 crore in 2022-23 and Rs 4,858 crore in 2021-22. This financial performance reflects the company’s position in the cement sector amid varying market conditions and operational challenges.
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