India Cements, UltraTech Cement gains up to 11% as CCI approves acquisition

CCIapproved making an open offer for up to 8,05,73,273 equity shares of Rs 10 each constituting 26 per cent of the equity share capital of the company, at a price of Rs 390 per equity share

The India Cements shares jumped 11 per cent in Monday's (December 23, 2024) trade, logging an intraday high at Rs 376.3 per share on BSE. The buying in the stock came after the Competition Commission of India (CCI) granted approval to UltraTech Cement acquirers. 

 

Around 9:22 AM, the India Cements shares were up 9.19 per cent at Rs 370.15 per share on BSE. In comparison, the BSE Sensex was up 0.72 per cent at 78,600.18. The market capitalisation of the Indian Cements stood at Rs 11,472.39 crore. The 52-week high of India Cements stood at Rs 385.5 per share and the 52-week low stood at Rs 172.55 per share. Meanwhile, UltraTech Cement shares were marginally up by 0.17 per cent at Rs 11,444.25 per share.

 

"We write this to inform you that the Competition Commission of India vide its communication dated December 20, 2024, granted its approval to the Acquirer," the filing read. 

 

As per the exchange filing, CCI gave a nod to UltraTech for acquisition of 10,13,91,231 equity shares of Rs 10 each representing 32.72 per cent of the equity share capital of the company held by the promoters, members of the promoter group, and the other shareholder.

 

Further, it approved making an open offer for up to 8,05,73,273 equity shares of Rs 10 each constituting 26 per cent of the equity share capital of the company, at a price of Rs 390  per equity share, from the public shareholders of the company.

 

On July 28, UltraTech Cement announced the acquisition of a 32.72 per cent stake in India Cements Ltd from promoters and their associates in a Rs 3,954-crore deal, which will expand its footprint in the highly competitive and fast-growing southern cement market.

 

Besides, UltraTech also announced a Rs 3,142.35 crore open offer to acquire a 26 per cent share of the India Cements from its shareholders.

 

ICICI Securities in its report dated December 2, 2024, upgraded UltraTech Cement from 'Hold' to 'Buy' with a target of Rs 13,033 per share.

 

The brokerage believes UltraTech, post the Kesoram and India Cements acquisition deals, is likely saddled with net debt of less than Rs 20,000 crore. 

 

"In our view, both companies may refrain from seeking leverage to gain capacity share further; more so, for the fear of further protracting competitive intensity," the filing read.

 

India Cements is one of the leading cement manufacturers in India, established in 1946 and headquartered in Chennai, Tamil Nadu. The company has a strong presence in the southern and western regions of India and caters to diverse construction needs across the country. Known for its quality and innovation, India Cements has played a significant role in infrastructure development and industrial growth.

 

UltraTech Cement is India’s largest cement manufacturer and a leading player in the global cement industry. Part of the Aditya Birla Group, the company was established in 1983 and is headquartered in Mumbai, Maharashtra. UltraTech is renowned for its extensive product portfolio, cutting-edge technology, and commitment to sustainability. 

 

In the past one year, India Cement shares have gained 34.6 per cent against Sensex's rise of 9.3 per cent.