UltraTech buys stake in India Cements as Birla-Adani battle heats up

Kumar Mangalam Birla’s UltraTech Cement Ltd bought a 22.7% non-controlling stake in rival India Cements Ltd as India’s biggest cement maker looked to widen its gap with the Adani group, which is on an acquisition spree.

UltraTech’s acquisition of the stake for ₹1,889 crore via block deals did not trigger an open offer under India’s takeover code, effectively deterring potential rival bids for the struggling firm.

Those who sold their stakes to UltraTech in the block deal included Radhakishan Damani, Gopikishan Damani, Kiran Devi Damani, Derive Investments and Derive Trading and Resorts, exchange data showed.

UltraTech bought 70.6 million shares of India Cements as a “non-controlling financial investment” at up to ₹267 a share, the cement maker told the exchanges on Thursday.

UltraTech Cement, which has a more than 150-million-ton (mt) capacity, added a 50 mt capacity just in the last five years, and is targeting a production capacity of 200 mt by March 2027.

With the latest deal, UltraTech has strengthened its position in Southern India, which accounts for one-third of the country’s total cement production.

Last year, the company had announced the acquisition of Kesoram Industries, which has a capacity of 10.75 mt, in a deal valued at ₹7,600 crore.

India’s competition watchdog approved the acquisition of Kesoram’s cement business in March this year, fast-tracking its goal to reach 200 mtpa by the end of fiscal 2027.

Earlier this month, Adani Group had acquired Penna Cement Industries Ltd at an enterprise value of ₹10,422 crore (about $1.25 billion) from promoters P. Pratap Reddy and family.

Ambuja Cement, the cement and building material company of Adani Group, signed a binding agreement to acquire 100% shares of PCIL.

The group acquired Ambuja and its subsidiary ACC Ltd from Switzerland’s Holcim Group for $6.4 billion in September 2022. It later acquired an additional 26% stake from public shareholders through a ₹31,000 crore ($3.72 billion) open offer.