Shares of UltraTech Cement Limited jumped 6% following the announcement of its acquisition.
UltraTech Cement announced plans to acquire up to 7.06 crore equity shares of India Cements (Photo: REUTERS/Amit Dave)
New Delhi,UPDATED: Jun 27, 2024 10:27 IST
Shares of UltraTech Cement Limited saw a 6% increase in early trading on Thursday following its announcement of investment in The India Cements Limited in an exchange filing.
UltraTech Cement announced plans to acquire up to 7.06 crore equity shares of India Cements at Rs. 267 per share for around Rs 1,885 crore, resulting in a 23% stake in the company.
This decision was approved by UltraTech's Board of Directors during a meeting held on June 27, 2024.
"The Board of Directors of the Company at its meeting held today approved making a financial investment to purchase up to 7.06 crores equity shares of The India Cements Limited, a company incorporated under the Indian Companies Act, 1913, having its registered office at Dhun Building, 827, Anna Salai, Chennai 600 002, (“ICL”) at a price of up to Rs. 267/- per share. This non-controlling financial investment constitutes around 23% of the equity share capital of India Cements Limited," said UltraTech Cement, a company of the Aditya Birla Group.
The investment, which is purely financial and not an internal transaction, aims to bolster UltraTech's competitive position within the cement industry.
As of the quarter ending in March, Radhakishan Shivkishan Damani and Gopikishan Shivkishan Damani collectively held a 20.78% stake in India Cements.
In response to this development, India Cements' shares hit an upper circuit of 10%, reaching Rs. 289.20 on the Bombay Stock Exchange (BSE).
This surge boosted the company's market capitalisation to Rs. 8,962.63 crore. Over the past year, India Cements' stock has risen by 31.31% and has gained 7.58% in 2024. A total of 625.11 lakh shares of the company changed hands, amounting to a turnover of Rs. 1,662.34 crore on the BSE.
Established in 1946 with its headquarters in Chennai, India Cements has consistently performed well, reporting a turnover of Rs. 5,112 crore in FY24, Rs. 5,608 crore in FY23, and Rs. 4,858 crore in FY22.
The acquisition is expected to be finalised within a month and will be funded through cash payments.
Earlier in the month, Adani Group-owned Ambuja Cements announced the acquisition of Penna Cement Industries Ltd (PCIL) for Rs 10,422 crore.
Published On:
Jun 27, 2024
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