UltraTech Cement acquires grinding unit from India Cements for ₹315 crore, share rise over 2%

Aditya Birla Group-owned UltraTech Cement shares gained more than 2% on Monday, April 19, after the company announced acquisition of a grinding unit and captive railway siding from India Cement for ₹315 crore.

In an exchange filing on April 20, the company said that it plans to invest an additional ₹504 in the new plant to expand the capacity of two units.

Shares of UltraTech Cement rallied as much as 2.27% to an intraday high of ₹9,576.55 apiece on the NSE in morning trade on Monday. Opening 1.5% higher from Friday's closing of ₹9,363 apiece, the stock saw an upward momentum. At 2:30 pm, UltraTech Cement shares were trading at ₹9,563 apiece, up 2.13% on the NSE after minor corrections from the high level.

Located in Maharashtra's Parli, the acquired plant has an installed capacity of 1.1 million tonnes per annum (MTPA). The acquisition was completed through an asset purchase agreement.

The Aditya Birla Group company has been eyeing rapid expansion with increased capital expenditure over the next three years. The company on April 2 announced that it plans on investing ₹32,400 crore towards capital expenditure over the next three-year period.

Previously, UltraTech Cement commissioned two new greenfield capacities with a combined output capacity of 5.4 MTPA in the states of Chhattisgarh and Tamil Nadu.

The new plants took the company's cement capacity to 151.6 MTPA, which is 1.5 times the capacity in the United States and 80% of Europe's capacity.

"It took 36 years for the cement business of the Aditya Birla Group, to get to a capacity of 100 MTPA. UltraTech has subsequently added the next 50 MTPA in less than 5 years with an investment of around ₹ 32,000 crores. Over the past two decades, UltraTech has grown 11x, far outpacing the industry growth of 4x," the company said in a statement.

With a total grey cement capacity of 146.2 MTPA, UltraTech is the third largest cement producer in the world, outside of China.