Aditya Birla Group Chairman Kumar Mangalam Birla. File
| Picture 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 10,13,91,231 fairness shares or 32.72% stake for ₹390 apiece totalling to ₹3,954 crore, topic to regulatory approvals.
In June, UltraTech acquired 7,05,64,656 fairness shares or 22.77% stake at a value of ₹268 per share. Publish the acquisition, UltraTech’s stake in India Cements will enhance to 55.49%, triggering an open provide. It should turn into a subsidiary of UltraTech Cement Ltd.
There won’t be any change in administration of the corporate until the completion of the acquisition, as per share buy agreements, India Cements stated in a separate submitting.
“Publish this monetary funding, the promoter group approached us as they needed to promote their holding within the firm, and we discovered it acceptable to amass their stake within the firm,” UltraTech stated in a regulatory submitting.
Given the restricted availability of limestone in Tamil Nadu, it has resulted in restrictions on organising of recent built-in models in Tamil Nadu. The Firm’s final built-in unit in Tamil Nadu was acquired by the Firm’s mother or father, Grasim Industries Ltd in August 1998. The proposed transaction is subsequently 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 stated.
The operational efficiencies arising out of buying prepared to make use of belongings will scale back time to market vis-a-vis greenfield tasks and also will present the Firm with the chance to judge the optimization/ deferment of the Firm’s current capability enlargement 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 each 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 in addition accelerates our path to over 200 MTPA capability,” stated Aditya Birla Group Chairman Kumar Mangalam Birla.
