Billionaire investor Radhakishan Damani and associates reportedly sold 23% equity stake in India Cements for ₹1,889 crore. The transaction was executed at an average price of ₹267.74 per share on the BSE, according to CNBC-TV18.
UltraTech Cement, the country's largest cement manufacturer, acquired the entire block, strengthening its footprint in the southern market. This acquisition aligns with UltraTech’s broader strategy of market consolidation and expansion, particularly in South India.
With this 23% stake in India Cements, UltraTech, boasting a capacity of 140 million tonnes per annum (mtpa), has made a decisive move in the ongoing consolidation within the cement industry. This strategic acquisition follows closely on the heels of the Adani Group's acquisition of Hyderabad-based Penna Cement for $1.25 billion, adding 14 mtpa capacity across Andhra Pradesh, Telangana, Maharashtra, and Rajasthan.
The cement sector has been buzzing with activity since the Adani Group's landmark purchase of Ambuja Cements and ACC in May 2022 for $10.5 billion, catapulting Adani to a significant position with over 65 mtpa capacity. This was followed by further acquisitions, including Sanghi Industries and a grinding unit of MyHome in Tamil Nadu, before the recent Penna deal.
G Chokkalingam, Founder of Equinomics Research, told BT that the presence of two large players, Adani and UltraTech, mitigates monopoly concerns and paves the way for more acquisitions. “Adani is now a strong No. 2 player and has ambitious plans to reach a production capacity of 140 mtpa by 2028. UltraTech, on the other hand, aims to exceed 200 mtpa,” he notes.
Regarding India Cements, which has a capacity of around 15 mtpa primarily in the south, Chokkalingam believes UltraTech will not remain a passive investor. “UltraTech is likely to increase its holding and reinforce its position in South India,” he said.
The promoter group, led by N Srinivasan, holds 28.42% in India Cements.
Analysts highlight that India Cements faces several challenges, such as lower operating margins. If UltraTech gains control, it will need to invest significantly in restructuring. Achieving a controlling stake would require UltraTech to acquire an additional 2% to reach 25%, triggering an open offer for another 26%. “UltraTech has a track record of turning around acquired assets, which will be crucial for India Cements,” said an industry analyst.