NEW DELHI: Aditya Birla Group flagship firm UltraTech Cement will purchase a 32.72 per cent stake in India Cements from promoters and their associates for Rs 3,954 crore to develop its footprint within the extremely aggressive and fast-growing Southern cement market, notably Tamil Nadu. Apart from, Ultratech has additionally introduced a Rs 3,142.35 crore open provide to accumulate one other 26 per cent share of India Cements Ltd (ICL) from its shareholders.

This announcement comes a month after Adani Group, the second largest cement maker introduced the acquisition of Hyderabad-based Penna Cement for Rs 10,422 crore, which can add 14 MTPA, taking its capability to 93 MTPA.

With an put in capability of 154.86 million tonnes each year (MTPA) of gray cement, UltraTech Cement leads the Indian cement business. It has an ambition to develop into one of many largest cement corporations on the planet and and has set a goal for 200 MTPA.

Nonetheless, Adani Group, which entered the cement enterprise in September 2022 after buying Ambuja Cement from Swiss agency Holcim for money proceeds of USD 6.4 billion (about Rs 51,000 crore), can be pacing up.

Adani Group has arrange a goal to attain a 140 MTPA capability by FY28 and is aggressively increasing organically by capability growth on the current items and in addition going for acquisitions. By way of Ambuja, it additionally controls ACC Ltd and bought MyHome Industries and Sanghi Industries in 2023.

The board of the Aditya Birla agency accepted the acquisition of 32.72 per cent stake from promoters and their associates at Rs 390 per share, in response to a regulatory submitting from UltraTech on Sunday.

It has entered into share buy agreements for a 28.42 per cent stake from promoters – Srinivasan N, Chitra Srinivasan, Rupa Gurunath and S Ok Asokh Baalaje and a 4.30 per cent share from Sri Saradha Logistics.

After the completion of the Rs 3,954 crore deal, UltraTech’s stake in India Cements Ltd (ICL) will enhance to over 55 per cent, mandating it to go for the open provide as per the Sebi rules.

The board UltraTech has additionally accepted an “open provide for as much as 8.05 crore fairness shares representing 26 per cent of the fairness share capital of the Goal, at a value of Rs 390 per fairness share from the general public shareholders of Goal”, the submitting mentioned.

The value provided by UltraTech is 4.1 per cent increased than the ICL share closing value of Rs 374.60 final Friday. If absolutely subscribed, the open provide would price Rs 3,142.35 crore to UltraTech.

“Put up signing of SPA and acquiring regulatory approvals, UltraTech pays Rs 3,954 crore at Rs 390/ share for purchasing 32.72 per cent stake in India Cements from the promoters & their associates. It will set off a compulsory open provide at Rs 390/ share. The open provide will likely be performed subsequently after acquiring all regulatory approvals,” the corporate mentioned in an announcement.

After the acquisition of the promoter’s stake and CCI approval, “the corporate can have sole management over ICL and develop into a promoter of ICL”, it mentioned.

In a separate submitting, ICL mentioned: “Upon completion of the Main Acquisition of Sale Shares, the Acquirer along with its current holdings, would maintain 55.49 per cent of the paid-up fairness share capital of the Firm and the Firm would develop into a subsidiary of the Acquirer i.e. UltraTech Cement”.

Nonetheless, former BCCI president N Srinivasan-led agency additionally added that “there is not going to be any change in Administration of Firm until completion of acquisition”.

In June, UltraTech acquired 23 per cent shares of ICL. It had acquired Damani-group’s stake in India Cements Ltd (ICL) by two block offers estimated at round Rs 1,900 crore.

The proposed transaction is, due to this fact, an endeavour to increase the corporate’s footprint and presence within the extremely fragmented, aggressive and fast-growing Southern market within the nation, notably Tamil Nadu, the place it has a restricted presence, mentioned UltraTech.

In line with UltraTech, the operational efficiencies arising out of buying ready-to-use property will scale back time to market vis-a-vis greenfield initiatives.

It’s going to additionally present UltraTech a chance to guage the optimisation of the corporate’s current capability growth plans within the Southern market, given the ready-to-use property of the goal, it added.

Nonetheless, UltraTech additionally added that the proposed transaction is topic to the approval of the Competitors Fee of India.

On the anticipated time for completion of the acquisition, UltraTech mentioned: “Each the first acquisition (from promoters) and the Open Provide are anticipated to be consummated inside six months, topic to the abovementioned regulatory approvals”.

UltraTech has at the moment just one built-in unit in Tamil Nadu Reddipalayam Cement Works, with a capability of 1.4 MTPA. Furthermore, there’s a paucity of limestone

Aditya Birla Group Chairman Kumar Mangalam Birla mentioned the India Cements alternative is an thrilling one, because it allows UltraTech to serve the Southern markets extra successfully and accelerates the trail to over 200 MTPA capability.

UltraTech Cement’s investments over time, each natural and inorganic, have been designed to propel India to develop into a constructing options champion globally. Each funding in a core sector like cement accelerates financial exercise and drives progress.”

“These investments have additionally facilitated India’s nationwide infrastructure improve, powering our nation’s rising want for housing, roads, and different very important infrastructure. This, in flip, has had an amazing influence on the lives and aspirations of individuals, he added.

ICL has a complete Group capability of 14.45 MTPA of gray cement. Of this, 12.95 MTPA is within the south, and 1.5 MTPA is in Rajasthan.

UltraTech, a USD 8.4 billion flagship firm of the Aditya Birla Group, has a consolidated capability of 152.7 Million Tonnes Per Annum (MTPA) of gray cement. It has 24 built-in manufacturing items, 33 grinding items, one clinkerisation unit and eight bulk packaging terminals.