India Cements, UltraTech Cement shares jumped up to 11% today; here's why

Shares of India Cements Ltd jumped 11 per cent while those of UltraTech Cement advanced 1 per cent in Monday's trade after the latter received Competition Commission of India (CCI) nod for acquiring a majority stake in the former.
As per the deal, UltraTech Cement would acquire 10,13,91,231 equity shares of Rs 10 each, representing 32.72 per cent of the equity share capital of India Cements held by the promoters, members of the promoter group and the other shareholder.

It would also make an open offer for up to 8,05,73,273 equity shares of Rs 10 per share 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. This was at 15 per cent premium to India Cement's Friday closing price of Rs 339.

On Monday, India Cements shares climbed 11 per cent to hit a high of Rs 376.30 on BSE. UltraTech Cement, on the other hand, rose 1.14 per cent to Rs 11,555 level at open.

Earlier on July 28, Ultratech Cement announced plans to acquire stake in India Cements for Rs 3,950 crore. Prior to this, UltraTech Cement had already purchased a 23 per cent stake in India Cements at Rs 268 per share.

The consolidation is seen help inject price discipline and is likely to generate better profitability and return ratios in the longer term. In the case of UltraTech, its management in October retained its double-digit volume growth target for H2FY2025, led by expected pick-up in government spending on infrastructure projects, sustained demand from urban housing, and pick-up in rural demand post good monsoons. The company continues to focus on efficiency improvement parameters, analysts noted.

The company's is looking to hit 200 mtpa global capacity by FY2027. Acquisitions of Kesoram and India Cements were expected to conclude by FY2025-end.