India Cements Ltd. Shares of which were recently acquired by UltraTech Cement Ltd., India’s largest cement company. The stock was acquired through a strong rally during Monday’s trading session, with shares rising as much as 11 percent.
Actually, the reason for the rise in the share price is the news of approval of a deal worth ₹ 7,000 crore through the Competition Commission of India (CCI), in which UltraTech Cement, promoted through billionaire Kumar Mangalam Birla, will buy the majority stake in India Cements.
The approval came as the CCI issued a show cause notice to UltraTech seeking clarification on the proposed deal, which will strengthen its market dominance in the face of growing competition from Adani Group, which is expanding its capacity through acquisitions. .
As per the deal, UltraTech Cement will purchase 10.13 crore equity shares of ₹10 each, representing 32.72% of the equity share capital of India Cements held through promoters, promoter group members and other shareholders.
Additionally it will make an open offer to purchase 8.05 crore equity shares from the company’s public shareholders at ₹10 per share, which will amount to 26 per cent of the company’s equity share capital. This was a 15% premium to India Cements’ Friday closing price of ₹339.
Earlier on July 28, UltraTech Cement had announced the acquisition of 32.72% stake in India Cements from the promoters and their associates in a deal worth ₹3,954 crore, which will strengthen its position in the southern cement market. Additionally, UltraTech had also announced the purchase of 26% stake from the shareholders of India Cements through an open offer for ₹3,142.35 crore.
Shares of India Cements surged as much as 11% to ₹376.20 on the NSE, while UltraTech Cement shares rose over one per cent to hit the day’s high of ₹11,582.45.
Disclaimer: This information is for informational purposes only and should not be construed as investment advice. It is recommended to consult a financial advisor before making investment decisions.