Cement stock jumps 11% after CCI approves Ultratech Cement’s acquisition plan

In a significant development within India’s cement sector, a leading industry giant has secured regulatory approval for a major acquisition, marking one of the largest consolidations in the space. The deal  involves a substantial promoter stake of 9.72 percent and an open offer for public shareholders, potentially reshaping the competitive landscape of the country’s cement industry.

Share Price Movement 

The share price of India Cements Limited went up by 10.92 percent to Rs. 376.2 per share on Monday, an increase from its previous close of Rs. 339.15 per share. The market capitalisation now stands at approximately Rs. 11,455 crore as of December 23, 2024.

What Happened 

The Competition Commission of India (CCI) approved UltraTech Cement’s acquisition of India Cements, involving a 32.72% promoter stake purchase and an open offer for 26% public shares at ₹390/share.

According to the agreement, UltraTech Cement will acquire 10,13,91,231 equity shares, each valued at Rs 10, representing 32.72% of the equity share capital of India Cements, currently held by the promoters, members of the promoter group, and another shareholder.

Q2 Financial Highlights

According to its recent filing, in the quarter ending September 2024, India Cements’s consolidated revenue from operations has decreased by 18.3 percent YOY from Rs. 1,264 crore in Q2 FY24 to Rs. 1,032 crore in Q2 FY25 and increased by 0.5 percent QoQ from Rs. 1,027 crore in Q4 FY24. 

The company’s consolidated net loss has increased from a loss of Rs. 80 crore in Q2 FY24 to  a loss of Rs. 339 crore in Q2 FY25. The company has given a profit of Rs. 58 crore in Q1 FY25.

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Market Outlook 

The cement industry experienced mixed fortunes in FY 2023–24, with fluctuating demand and inconsistent regional performance. Overall growth was 9.1%, though demand slowed in the second half. South India lagged with low capacity utilization. Prices fell amid stiff competition despite stable fuel costs. Future prospects hinge on infrastructure investment.

Shareholding Pattern

As of the September 2024 shareholding pattern, India Cements Limited is primarily held by the promoters at 28.42 percent, foreign institutional investors hold 16.17 percent, and the public with 49.36 percent.

About Company 

Established in 1946, India Cements Limited is a cornerstone of India’s cement industry. Headquartered in Chennai, Tamil Nadu, the company operates multiple integrated cement plants nationwide, boasting an impressive production capacity of 15.5 million tonnes annually. Its iconic brands, including Sankar Super Power, Coromandel King, and Raasi Gold, have earned trust across diverse markets.  

The company’s operations extend beyond cement manufacturing. It produces wall putty and operates in power generation, sugar production, and shipping through its subsidiaries. Strategic mergers with Trinetra Cement Ltd and Trishul Concrete Products Ltd strengthened its foothold. With a rich history rooted in Tamil Nadu, India Cements has embraced innovation to adapt to evolving market demands.  

Under the leadership of Vice Chairman and Managing Director N. Srinivasan since 2016, India Cements continues to thrive. Its commitment to quality and legacy ensures its pivotal role in building India’s infrastructure.

Written By Fazal Ul Vahab C H

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