The Aditya Birla Group has further consolidated its position as the largest cement manufacturer in the country after acquiring a majority stake in a prominent South India-based firm. UltraTech Cement Ltd, owned by the Birla family, has purchased a 32.72% holding from the outgoing promoters of India Cements Ltd for Rs 3,954 crore.
India Cements, which was established in 1946, is currently undergoing a transition with its founder N Srinivasan relinquishing control. The highly experienced businessman has opted to divest from the company after leading it for several decades. As part of the transaction, Srinivasan has fully exited from India Cements and divested his family’s sizable stake to the Aditya Birla conglomerate.
With the latest acquisition, UltraTech will obtain a substantial 55.49% ownership in India Cements. Additionally, it will make an open offer to purchase another 20% from public shareholders at the same price of Rs 390 per share, amounting to around Rs 2,400 crore. Upon completing the open offer, UltraTech’s holding could rise to a dominant 75.49% in the Madras-headquartered cement firm.
The transaction values India Cements at roughly Rs 11,608 crore based on its current market capitalization. With its latest purchase, UltraTech bolsters its pan-India footprint and further fortifies its leadership position in the domestic cement sector. Kumar Mangalam Birla, Chairman of the Aditya Birla Group, expressed confidence that the investment will aid its vision of propelling India to become a global building solutions leader.
The acquisition provides UltraTech an opportunity to gain a prominent market share in South India and augment its overall capacity. India Cements has a total annual production capacity of 14.45 million tonnes, with significant operations based in Tamil Nadu and portions in Rajasthan. Subject to receiving customary regulatory clearances, the deal is slated to be completed over the coming months.
