UltraTech Cements, owned by Aditya Birla Group, announced its plans to acquire a 23 per cent stake in Chennai-based India Cements, raising speculations over a hostile takeover.
UltraTech Cement will buy 7.06 crore shares at a price of up to Rs 267 per share. According to an exchange filing, this is a non-controlling financial investment in India Cements. The company has acquired 6.02 crore equity shares aggregating to 19.44 per cent. India Cements had reported a turnover of Rs 5,112 crore in FY24 against Rs 5,608 crore in FY23.
The company has not revealed the entities from which the stake will be bought. However, as per market sources, the shares have been mostly bought from D-Mart founder Radhakishan Damani and his associated entities, who held a 20.78 per cent stake in India Cements. ELM Park Fund Ltd holds a 5.58 per cent stake and LIC holds a 3.6 per cent stake in India Cements.
India Cements owner N Srinivasan who, along with other promoter group members, holds only a 28.42 per cent stake, which can trigger a hostile takeover.Though the 23 per cent stake purchase will not trigger a mandatory open offer of 26 per cent from public shareholders, UltraTech can go ahead if it intends to take over control of the company.
UltraTech's move can be seen as a calculated effort to consolidate its dominance in the market, which has seen Adani Group increasing its share with a few acquisitions in the recent past. The sector has seen consolidation over the past few years, with major players looking to enhance their capacities and market share through acquisitions.
