UltraTech to acquire India Cement; buy 32.72 pc promoters' stake for Rs 3,954 cr
New Delhi, Jul 28: Aditya Birla Group flagship company UltraTech Cement will acquire a 32.72 per cent stake in India Cements from promoters and their associates for Rs 3,954 crore to expand its footprint in the highly competitive and fast-growing Southern cement market, particularly Tamil Nadu.
Besides, Ultratech has also announced a Rs 3,142.35 crore open offer to acquire another 26 per cent share of India Cements Ltd (ICL) from its shareholders.
This announcement comes a month after Adani Group, the second largest cement maker announced the acquisition of Hyderabad-based Penna Cement for Rs 10,422 crore, which will add 14 MTPA, taking its capacity to 93 MTPA.
With an installed capacity of 154.86 million tonnes per annum (MTPA) of grey cement, UltraTech Cement leads the Indian cement industry. It has an ambition to become one of the largest cement companies in the world and and has set a target for 200 MTPA.
However, Adani Group, which entered the cement business in September 2022 after acquiring Ambuja Cement from Swiss firm Holcim for cash proceeds of USD 6.4 billion (about Rs 51,000 crore), is also pacing up.
Adani Group has set up a target to achieve a 140 MTPA capacity by FY28 and is aggressively expanding organically through capacity expansion at the existing units and also going for acquisitions. Through Ambuja, it also controls ACC Ltd and acquired MyHome Industries and Sanghi Industries in 2023.
The board of the Aditya Birla firm approved the acquisition of 32.72 per cent stake from promoters and their associates at Rs 390 per share, according to a regulatory filing from UltraTech on Sunday.
It has entered into share purchase agreements for a 28.42 per cent stake from promoters - Srinivasan N, Chitra Srinivasan, Rupa Gurunath and S K Asokh Baalaje and a 4.30 per cent share from Sri Saradha Logistics.
After the completion of the Rs 3,954 crore deal, UltraTech's stake in India Cements Ltd (ICL) will increase to over 55 per cent, mandating it to go for the open offer as per the Sebi regulations.
The board UltraTech has also approved an "open offer for up to 8.05 crore equity shares representing 26 per cent of the equity share capital of the Target, at a price of Rs 390 per equity share from the public shareholders of Target", the filing said.
The price offered by UltraTech is 4.1 per cent higher than the ICL share closing price of Rs 374.60 last Friday. If fully subscribed, the open offer would cost Rs 3,142.35 crore to UltraTech.
"Post signing of SPA and obtaining regulatory approvals, UltraTech will pay Rs 3,954 crore at Rs 390/ share for buying 32.72 per cent stake in India Cements from the promoters & their associates. This will trigger a mandatory open offer at Rs 390/ share. The open offer will be done subsequently after obtaining all regulatory approvals," the company said in a statement.
After the acquisition of the promoter's stake and CCI approval, "the company will have sole control over ICL and become a promoter of ICL", it said.
In a separate filing, ICL said: "Upon completion of the Primary Acquisition of Sale Shares, the Acquirer together with its existing holdings, would hold 55.49 per cent of the paid-up equity share capital of the Company and the Company would become a subsidiary of the Acquirer i.e. UltraTech Cement".
However, former BCCI president N Srinivasan-led firm also added that "there will not be any change in Management of Company till completion of acquisition".
In June, UltraTech acquired 23 per cent shares of ICL. It had acquired Damani-group's stake in India Cements Ltd (ICL) through two block deals estimated at around Rs 1,900 crore.
The proposed transaction is, therefore, an endeavour to extend the company's footprint and presence in the highly fragmented, competitive and fast-growing Southern market in the country, particularly Tamil Nadu, where it has a limited presence, said UltraTech.
According to UltraTech, the operational efficiencies arising out of acquiring ready-to-use assets will reduce time to market vis-a-vis greenfield projects.
It will also provide UltraTech an opportunity to evaluate the optimisation of the company's existing capacity expansion plans in the Southern market, given the ready-to-use assets of the target, it added.
However, UltraTech also added that the proposed transaction is subject to the approval of the Competition Commission of India.
On the expected time for completion of the acquisition, UltraTech said: "Both the primary acquisition (from promoters) and the Open Offer are expected to be consummated within six months, subject to the abovementioned regulatory approvals".
UltraTech has currently only one integrated unit in Tamil Nadu Reddipalayam Cement Works, with a capacity of 1.4 MTPA. Moreover, there is a paucity of limestone
Aditya Birla Group Chairman Kumar Mangalam Birla said the India Cements opportunity is an exciting one, as it enables UltraTech to serve the Southern markets more effectively and accelerates the path to over 200 MTPA capacity.
UltraTech Cement's investments over the years, both organic and inorganic, have been designed to propel India to become a building solutions champion globally. Every investment in a core sector like cement accelerates economic activity and drives progress."
"These investments have also facilitated India's nationwide infrastructure upgrade, powering our country's growing need for housing, roads, and other vital infrastructure. This, in turn, has had a tremendous impact on the lives and aspirations of people, he added.
ICL has a total Group capacity of 14.45 MTPA of grey cement. Of this, 12.95 MTPA is in the south, and 1.5 MTPA is in Rajasthan.
UltraTech, a USD 8.4 billion flagship company of the Aditya Birla Group, has a consolidated capacity of 152.7 Million Tonnes Per Annum (MTPA) of grey cement. It has 24 integrated manufacturing units, 33 grinding units, one clinkerisation unit and 8 bulk packaging terminals.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
MP HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
