Cement major UltraTech Cement on Thursday announced to buy 23 percent stake in Chennai-based India Cements Limited for about Rs 1,885 crore. According to the information given by UltraTech Cement to the stock market, the company will buy 7.06 crore shares of India Cements at a price of Rs 267 per share. According to the company information, its board of directors approved the financial investment to buy 7.06 crore shares of India Cements Limited in the meeting held on Thursday.
UltraTech Cement is continuously expanding
According to the news, the transaction value of this acquisition is Rs 1,885 crore on the basis of Rs 267 per share. According to UltraTech, this non-controlling financial investment is about 23 percent of the share capital of India Cements. Cement manufacturer UltraTech Cement is continuously expanding and has increased its capacity by 18.7 MTPA in the last 12 months. The indicative time period for completion of the deal between the two companies is one month.
UltraTech shares surge
Shares of India’s largest cement company UltraTech rose 6 per cent and hit a new peak of Rs 11,811. At around 10.15 am, the company’s shares were up 4 per cent at Rs 11,614. Shares of India Cements were up 9 per cent at Rs 288. However, the stock’s gains declined later. At 1:04 pm on the BSE, the company’s stock was trading at Rs 11460.95 with a jump of 2.79%.
Competition among big companies
According to Reuters, Ashutosh Murarka, research analyst at Choice Broking, said it is becoming clear that big companies are competing with each other in South India. He said the stake deal has increased the nationwide rivalry between UltraTech and its smaller rival Adani Group and will definitely hurt regional competitors. As of March, UltraTech had an 11% market share in the South Indian cement market, after it opened the new tab cement business of Kesoram Industries for $645 million last year.
Latest Business News