India Cements shares experienced a significant rally, soaring by 11% in intraday trading on Monday, following the Competition Commission of India’s (CCI) approval of UltraTech Cement’s ₹7,096 crore acquisition bid. The approval, granted on 20 December 2024, comes just two weeks after the regulator issued a show-cause notice to UltraTech, requesting clarification on the deal. This development marks a key milestone in UltraTech’s push to acquire a controlling stake in India Cements.
The surge in India Cements’ share price saw the stock hitting ₹376.30 on the Bombay Stock Exchange (BSE), moving closer to its all-time high of ₹385.50, which was reached on July 29, 2024. The stock has risen a remarkable 118% from its 52-week low of ₹172.55, recorded in June 2024. Over the past six months, shares of India Cements have increased by 56%, and the company has seen a 40% rise in the last year. UltraTech Cement, India’s largest cement manufacturer and part of the Aditya Birla Group, is set to acquire a 58.72% stake in India Cements. The acquisition will be executed in two phases: the first phase involves UltraTech purchasing 32.72% of India Cements’ shares from the promoters and their group at ₹390 per share, while the second phase entails an open offer to the public shareholders to buy an additional 26% stake at the same price.
This acquisition is seen as a strategic move by UltraTech to strengthen its foothold in the southern cement market, which has been growing rapidly. India Cements, a leading player in South India, boasts a cement capacity of 14.5 million tonnes per annum (MTPA), with a strong presence in states like Tamil Nadu, Telangana, Andhra Pradesh, and Rajasthan. The acquisition complements UltraTech’s existing operations in the region, providing both companies with a potential for enhanced market share. The deal is expected to benefit both companies, with analysts suggesting that UltraTech may work out a strategic cement supply agreement with India Cements to further expand its market presence in under-supplied regions like Andhra Pradesh and Telangana. Moreover, this partnership could bolster India Cements’ financial performance, with volume improvements expected as the deal progresses.
