Radhakishan Damani Foregoes Ownership of Stake in India Cements

UltraTech Cement has acquired a 23% stake in India Cements for approximately Rs 1,900 crore. This strategic move prevents potential future bids for the prominent peninsular manufacturer as competition intensifies to control capacities in the highly regionalized and freight-intensive cement industry, which is the second largest in the world after China. The shares were purchased from billionaire investor Radhakishan Damani, his family members, and his investment firms, Derive Investments and Derive Trading and Resorts.

UltraTech, part of the Aditya Birla Group and the largest cement manufacturer in India, acquired 70.6 million shares of India Cements at up to Rs 267 per share, classifying it as a "non-controlling financial investment," according to filings made on Thursday morning. Manish Valecha, a research analyst at Anand Rathi Institutional Equities, noted that by investing Rs 1,900 crore, UltraTech has effectively blocked the capacity of almost 15 million tonnes. This strategic investment places UltraTech ahead in the race for capacity additions, ensuring that this significant capacity will not be available to competitors.

This acquisition follows closely on the heels of Adani Cement's announcement earlier this month regarding its buyout of south-based Penna Industries, which has a 14-million-tonne capacity. Adani Cement and JSW Cement were also reportedly interested in acquiring Damani's stake in India Cements.

With this acquisition, UltraTech Cement, which already boasts a capacity of over 150 million tonnes in the world's second-largest cement-manufacturing and consuming market, is well on its way to achieving its targeted production capacity of 200 million tonnes by March 2027. Currently holding a 23-24% market share in India, UltraTech has added more than 50 million tonnes of capacity over the past five years, with 19 million tonnes added in a single year alone.