India Cements soars 11% as UltraTech Cement’s stake buyout gets CCI nod

Shares of India Cements surged 11% in early trade on Monday after the Competition Commission of India (CCI) approved UltraTech Cement Ltd’s controlling stake in The India Cements Ltd.

Under the approved deal, UltraTech Cement will acquire a 32.72% stake in India Cements from its promoters and members of the promoter group, as well as from Sri Saradha Logistics Private Limited. UltraTech will make an open offer to acquire up to 26 per cent more of the paid-up equity share capital of India Cements, taking its total potential shareholding to nearly 59%.

In a press release issued on Friday, December 20, the CCI said, “The Proposed Combination envisages UltraTech Cement Limited’s acquisition of (i) 32.72 per cent of the paid-up equity share capital of The India Cements Limited from the promoters and members of the promoter group of India Cements and Sri Saradha Logistics Private Limited, and (ii) up to 26 per cent of the paid-up equity share capital of India Cements by way of an open offer.”

The deals beyond a certain threshold require approval from the regulator, which keeps a tab on unfair business practices and promotes fair competition in the marketplace.

UltraTech Cement, a subsidiary of Grasim Industries Ltd, is a leading player in the manufacture and sale of grey cement, white cement, ready-mix concrete, and other building products. India Cements operates primarily in the grey cement and ready-mix concrete segments, along with other non-core businesses.

The deal, which combines promoter stake acquisition and an open market offer, is designed to give UltraTech Cement majority control over India Cements while adhering to regulatory requirements.

India Cements stock was trading at ₹365.00, up 7.62% from Friday's close, on the BSE as of 11:00am.