Aditya Birla Group Chairman Kumar Mangalam Birla. File
| Photograph Credit score: Shashi Ashiwal
Aditya Birla group-owned UltraTech on July 28 entered right into a share buy settlement with the promoters and their associates of India Cements Ltd to buy 10,13,91,23 fairness shares or 32.72% stake for ₹390 apiece totalling to ₹3,954 crore, topic to regulatory approvals.
In June, Extremely Tech acquired 7,05,64,656 fairness shares or 22.77% stake at a worth of ₹268 per share. Put up the acquisition, UltraTech’s stake in India Cements will improve to 55.49%, triggering an open provide. It’ll turn out to be a subsidiary of UltraTech Cement Ltd.
There is not going to be any change in administration of the corporate until the completion of the acquisition, as per share buy agreements, India Cements mentioned in a separate submitting.
“Put up this monetary funding, the promoter group approached us as they needed to promote their holding within the firm, and we discovered it applicable to accumulate their stake within the firm,” UltraTech mentioned in a regulatory submitting.
Given the restricted availability of limestone in Tamil Nadu, it has resulted in restrictions on organising of latest built-in models in Tamil Nadu. The Firm’s final built-in unit in Tamil Nadu was acquired by the Firm’s mum or dad, Grasim Industries Ltd in August 1998. The proposed transaction is due to this fact an endeavour to increase the Firm’s footprint and presence within the extremely fragmented, aggressive and fast-growing Southern market within the nation, significantly Tamil Nadu, the place it has restricted presence, UltraTech mentioned.
The operational efficiencies arising out of buying prepared to make use of belongings will scale back time to market vis-a-vis greenfield initiatives and also will present the Firm with the chance to guage the optimization/ deferment of the Firm’s present capability growth plans within the Southern market, given the prepared to make use of belongings of the goal.
This may assist increase the Firm’s solely built-in unit in Tamil Nadu, Reddipalayam Cement Works (1.4 MTPA), which has paucity of limestone with restricted lifecycle availability.
India Cements has a complete capability of 14.45 million tonnes every year (MTPA) of gray cement. Of this, 12.95 MTPA is within the South (significantly Tamil Nadu) and 1.5 MTPA in Rajasthan, whereas UltraTech is the third largest cement producer on the earth, outdoors of China, with a complete Gray Cement capability of 154.86 MTPA.
“The India Cements alternative is an thrilling one because it allows UltraTech to serve the Southern markets extra successfully and likewise accelerates our path to over 200 MTPA capability,” mentioned Aditya Birla Group Chairman Kumar Mangalam Birla.
