UltraTech Cement to Acquire 23% Stake in India Cements Ltd for ₹1,885 Crore! UltraTech Cement Ltd., one of India’s largest cement producers, has declared its intention to purchase a 23% share in India Cements Ltd. The UltraTech Board approved a strategic investment on Thursday to purchase up to 7.06 crore equity shares of ICL at ₹267 per share, totaling up to ₹1,885 crore.
Market Reaction
Following the announcement, India Cements Ltd’s shares surged about 14% on Thursday morning. The stock surged to a 52-week high of ₹299 on the BSE, representing a 13.70% rise. On the NSE, it rose 13.77% to ₹298.80, a 52-week high. UltraTech Cement shares surged 6.51% to a one-year high of ₹11,875.95 on the BSE.
Details about the investment
UltraTech Cement’s board of directors approved the financial investment during its meeting on Thursday. The company aims to purchase up to 7.06 crore equity shares of India Cements at a price of ₹267 each. This non-controlling financial investment will account for roughly 23% of India Cements’ equity share capital.
Company Profiles
- UltraTech Cement Ltd.: UltraTech Cement is a major player in the Indian cement industry, with a consolidated capacity of 152.7 Million Tonnes Per Annum (MTPA) of grey cement. The company operates 24 integrated manufacturing units, 33 grinding units, one clinkerisation unit, and 8 bulk packaging terminals, making it one of the largest cement producers in the country.
- India Cements Ltd.: India Cements, based in Chennai, reported a turnover of ₹5,112 crore for the financial year 2023-24. The company has a significant presence in the southern Indian market and is known for its robust distribution network and strong brand presence.
Strategic implications.
This investment by UltraTech Cement is viewed as a strategic move to increase its position in the Indian cement market. UltraTech’s acquisition of a significant share in India Cements aims to capitalize on synergies and increase its market position in Southern India. The transaction is intended to increase UltraTech’s capacity and distribution capabilities, bolstering its position as the country’s biggest cement manufacturer.
Conclusion
UltraTech Cement’s acquisition of a 23% share in India Cements Ltd marks a significant step in India’s cement sector. This strategic investment is projected to increase shareholder value and UltraTech’s market position. The good market reaction to the announcement demonstrates investor confidence in the potential synergies and growth prospects created by this transaction.
Stay tuned for further information on this strategic investment and its potential influence on the Indian cement industry.
Source: Business insider India
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