Strategic Acquisition Improves Market Position
The board of UltraTech Cement, India’s largest cement company, authorized the acquisition of a 23% share in India Cements for ₹1,885 crore. UltraTech hopes to increase its market position and grow in the Indian cement business with this strategic initiative.
Acquisition Details
The deal entails buying 7.06 crore India Cements shares at an average price of ₹267 each. The acquisition was confirmed after a busy pre-market block window activity, when 6. crore shares, representing 19.4% of India Cements’ equity, traded at an average price of ₹265 per.
UltraTech Cement, with a 152.7 MTPA capacity, is expanding after acquiring Kesoram’s cement business for ₹7,600 crore. The new India Cements shareholding strengthens its industry leadership.
Market Responses
India Cements shares rose 8.67% to ₹285.4 on Thursday, following a 14% increase the day before. The stock’s performance led to its F&O prohibition, limiting new investments. Meanwhile, UltraTech Cement’s share price rose 5% to ₹11,700 on the National Stock Exchange.
Financial Metrics and Stakeholders
South Indian cement giant India Cements has 15.5 MTPA of installed capacity. The March quarter saw promoters own 28.42% of the firm. Public shareholders, including Radhakishan Damani and his associates, own more than 25% of the equity. Mutual funds and ELM Park Fund own 4.67% and 5.58%, respectively.
India Cements has a 17x Enterprise Value to EBITDA multiple for 2025 and 13.69x for FY26. The 20.8x FY25 and 17.15x FY26 multiples of UltraTech demonstrate its significant market value.
Industry Implications
Adani Cements recently announced the acquisition of Penna Cements, another southern-based firm, for approximately ₹10,422 crore. Due to competition among prominent firms, the cement sector is projected to consolidate.
“We expect cement consolidation to continue with industry leaders having strong balance sheets,” said Prabhudas Lilladher research analyst Tushar Chaudhari. Players competing for market share should intensify competition.”
Future prospects
UltraTech Cement’s recent investments, such as ₹32,400 crore for production capacity expansion over the next three years, demonstrate its ambitious growth plan. The business will raise its gray cement capacity to 198.2 MTPA to strengthen its market dominance.
India Cements’ investment should give UltraTech strategic benefits, including market share and operational synergy. This change will influence the Indian cement industry’s competitive landscape, benefiting stakeholders and boosting growth.
Conclusion
For ₹1,885 crore, UltraTech Cement acquired a 23% interest in India Cements, indicating further consolidation in the cement business. While industry leaders enhance their portfolios, UltraTech’s market position will improve with this smart move. “We believe consolidation is expected to continue in the cement space, with industry leaders having strong balance sheets,” said Tushar Chaudhari, predicting industry development and integration.