Aditya Birla Group's UltraTech Cement has announced the acquisition of a 23% stake in India Cements, a company led by former BCCI president N Srinivasan, for over Rs 1,900 crore. This move is expected to increase UltraTech's manufacturing capacity and bolster its competition against Adani Group. The acquisition was made through two block deals and UltraTech will now become the second-largest shareholder in India Cements. Adani Group had recently announced its own acquisition of Penna Cement, adding 14 MTPA to its capacity.
UltraTech Cement Acquires Stake in India Cements, Strengthening Market Position
In a significant move, UltraTech Cement, owned by the Aditya Birla Group, has acquired a 23% stake in India Cements, led by former BCCI president N Srinivasan. The deal, valued at over Rs 1,900 crore, aims to bolster UltraTech's manufacturing capacity and strengthen its position in the cement industry.
Background
India Cements is one of the largest cement producers in India, with an annual capacity of 25.6 MTPA (million tonnes per annum). The company has a strong presence in South India, particularly in Tamil Nadu. UltraTech Cement, on the other hand, is the largest cement producer in the country, with a capacity of 119.95 MTPA. The acquisition will increase UltraTech's market share and enhance its ability to compete with rival Adani Group.
Deal Details
UltraTech acquired the stake through two block deals on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The company purchased 20.47% of India Cements shares from the former managing director, N Srinivasan, and his wife, Vijayalakshmi Srinivasan. Additionally, UltraTech bought 2.53% of the company's shares from the market.
Impact on the Industry
The acquisition is expected to have a significant impact on the cement industry in India. UltraTech Cement will now become the second-largest shareholder in India Cements, behind the Srinivasan family. The deal will increase UltraTech's manufacturing capacity by 25.6 MTPA and strengthen its presence in South India.
Competition from Adani Group
The acquisition comes at a time when the cement industry is witnessing intense competition from Adani Group. Adani recently acquired Penna Cement, adding 14 MTPA to its capacity. The move by UltraTech is seen as a countermeasure to Adani's growing presence in the cement market.
Top 5 FAQs
To increase its manufacturing capacity, strengthen its market position, and compete with Adani Group.
Over Rs 1,900 crore.
India Cements will gain access to UltraTech's technical expertise and resources, which could enhance its operations.
The acquisition is expected to increase competition and consolidation in the industry.
The acquisition supports UltraTech's goal of becoming a global cement leader and strengthening its position in the Indian market.
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