India Cements and UltraTech Cement made headlines as the Competition Commission of India (CCI) approved a landmark acquisition deal. Granted on December 20, 2024, this approval enables UltraTech Cement to acquire a 32.72% stake in India Cements. This marks a pivotal move in the competitive cement industry.
India Cements shares surge after CCI approval
The announcement of the CCI approval triggered a sharp rise in India Cements’ shares. On December 23, 2024, the stock surged 11% intraday, reaching ₹376.3 per share on the BSE. This rally boosted the company’s market capitalisation to ₹11,472.39 crore.
Meanwhile, UltraTech Cement shares recorded a slight increase of 0.17%, closing at ₹11,444.25. The news enhanced investor confidence and positively impacted India Cements’ market performance.
Details of UltraTech Cement’s acquisition
UltraTech Cement is set to acquire over 10 crore equity shares, representing a 32.72% stake in India Cements, for ₹390 per share. Additionally, the company plans an open offer for a 26% stake, targeting public shareholders. This ₹3,954 crore deal strengthens UltraTech’s presence in southern India’s cement market.
Impact on the cement industry
This acquisition positions UltraTech Cement as a leader in the southern and western markets. The move is timely, given the increasing competition from players like the Adani Group, which has been expanding its capacity.
India Cements, known for its regional strength and quality products, will benefit from UltraTech’s resources and reach. The collaboration is expected to drive growth and improve operational efficiency for both firms.
Future outlook for India Cements and UltraTech Cement
Brokerages have responded optimistically. ICICI Securities recently upgraded UltraTech Cement to a ‘Buy’ rating with a target price of ₹13,033 per share. Analysts predict the acquisition will enhance UltraTech’s market share and financial health, keeping net debt levels manageable.
India Cements remains a crucial player in India’s infrastructure growth, backed by its legacy of quality and innovation.
With the CCI’s nod, this deal will reshape the industry’s competitive landscape, offering long-term benefits to stakeholders and paving the way for sustained growth.
