Kumar Mangalam Birla cemented his position as India's top building materials maker by acquiring N Srinivasan's cement business for Rs 3,954 crore. UltraTech Cement's move includes a 33% stake in India Cements. This deal, pending regulatory approval, aims to expand UltraTech's reach in southern India, especially Tamil Nadu, enhancing its capacity and market presence.
MUMBAI/CHENNAI: Billionaire Kumar Mangalam Birla has acquired N Srinivasan’s cement business for Rs 3,954 crore. UltraTech Cement, part of the $65-billion Aditya Birla conglomerate, will acquire a 33% stake in India Cements. The deal values the Chennai-based company at Rs 390 per share.
This acquisition adds to the 23% stake UltraTech purchased in June. UltraTech will also make an open offer to public shareholders to acquire an extra 26% stake. This will raise the total cost for UltraTech to Rs 7,100 crore, pending regulatory approval. This deal extends UltraTech’s footprint in the fragmented and fast-growing southern market.
UltraTech has faced limestone scarcity in Tamil Nadu, limiting new integrated units since August 1998. This acquisition adds India Cements’ 14.5 million tonnes capacity spread across Telangana, Andhra Pradesh, and Rajasthan. UltraTech’s capacity will increase from 153 million tonnes, including 1,855 new employees. UltraTech’s only integrated unit in Tamil Nadu has a capacity of 1.4 million tonnes. India Cements has a capacity of 6 million tonnes in Tamil Nadu.
Conglomerate chair Kumar Mangalam Birla said the India Cements opportunity is “exciting” for UltraTech’s growth. This acquisition enables UltraTech to serve the southern market more effectively and expand capacity. UltraTech is up against Ambuja Cements, part of Gautam Adani’s enterprise, which has a capacity of 89 million tonnes.
This deal follows Birla’s acquisition of a 23% stake in India Cements from DMart founder Radhakisan Damani. UltraTech purchased the stake for Rs 1,885 crore at Rs 267 per share, marking a significant “financial investment.” Following this investment, the promoters of India Cements approached UltraTech about selling their holding in the company.
Srinivasan joined India Cements after his father, the company’s co-founder, passed away in 1968. Currently the vice chairman and MD, Srinivasan, 79, faces health issues and plans to step down. His wife and daughter, Rupa Gurunath, are not interested in running India Cements, leading to their decision to sell.