In a significant development, Aditya Birla Group-owned Ultratech has further expanded its dominance in the Indian cement business. Ultratech's board of directors or BOD, has approved the purchase of a 32.72 per cent stake in Chennai-based cement giant India Cements from the promoters and their associates.
The Sector-Altering Acquisition
This also includes the shares of former BCCI President and company MD N. Srinivasan. This, according to many, marks the end of an era. This comes right after the Mumbai-based cement company's 22.77 per cent equity purchase in June of this year.
The stakes were then purchased at a price of Rs 268 per share.
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This current acquisition is valued at Rs 3954 crore for Rs 390 per share. It is to be noted that this particular move will trigger a mandatory open offer.
The company also owns the IPL team, Chennai Superkings.
Here, a mandatory open offer is triggered when an acquirer or person acting in concert intends to acquire a minimum of at least 26 per cent of a target company's (in this case, India Cements) shares.
India Cements is arguably one of the largest names in the southern part of the company. The company wields a cumulative capacity of 14.45 million tonnes per annum (mtpa) of grey cement.
Former BCCI President and company India Cements MD N. Srinivasan. The company also owns the IPL team, Chennai Superkings. | Photo: PTI
Ultratech Shares Close in Green
This presence of the company can be exploited by Ultratech, which is the largest cement maker in India, to further expand its presence in different territories. The company, on its own, is said to have a total capacity of 154.86 million tonnes per annum (mtpa) of grey cement.
This comes at a time when the Adani group's foray and subsequent expansion into the sector with multiple acquisitions. Most famously, Adani acquired the major names, including ACC Cements and Ambuja Cements.
Ultratech Cements shares closed in green on Friday, July 26. The cement company's share price gained 1.95 per cent or Rs 222.55, before closing at Rs 11,664.05 per share.
