Ultra cement acquires 23% in Chennai- based India Cements Ltd

UltraTech Cement, promoted by Kumar Mangalam Birla announced on Thursday that they have acquired a 23% share in Chennai's India Cements Ltd (ICL) for Rs 1,889 crore as they strive to secure dominance in the industry.

The deal happened two weeks after Adani group's Ambuja Cements announced the acquisition of Penna Cements for Rs 10,422 crore.

 UltraTech, acquired 70.56 million shares of ICL from billionaire investor Radhakishan Damani and his related entities in two block transactions, at an average price of ₹268 per share. 

The company stated that it was a 'non-controlling financial investment'.

N Srinivasan and other promoters of ICL will retain their position as the primary shareholders in the company, holding a combined stake of 28.42 percent.

UltraTech Cement's shares rose by 6% to reach a new peak of ₹11,811 during Thursday's intraday trading, before closing at ₹11,715 each. The closing price of India Cements stocks was ₹293, marking an increase of 11.49 per cent.

The transaction triggered rumours of a hostile takeover of ICL by UltraTech. Acquiring a 23 percent stake in ICL will prevent a competitor from making a bid, without requiring an open offer.

Many view the decision as a strategic move due to UltraTech's rising competition from the Adani group, especially in the South Indian market.