India’s largest building materials constructor, billionaire ‘Kumar Mangalam Birla', has signed a deal with N. Srinivasan to acquire their cement business worth over 3,954 crore with the purpose of strengthening their position in the market. Ultratech Cement, one of the largest conglomerate companies of Aditya Birla, will acquire a 33% stake in India Cements. Additionally, the company provides an offer to the public shareholders of India Cements for the purpose of acquiring extra stakes at the same price, which will gradually raise the cost up to Rs 7,100 crore.
The deal is going to expand into Southern’s highly fragmented and fast-increasing market, especially in Tamil Nadu. The shortage of limestone in this region has confined the company to setting up a new business. Around 14.5 million metric tons of India cement will reach across Rajasthan, Andhra Pradesh, and Telangana. Although, in Tamil Nadu, Ultratech’s consolidated units have a capacity of 1.4 million, India Cement has a capacity of 6 million metric tons. Mangalam Birla (Chairperson) often said that the cement company will enable Ultratech to reach the Southern market more efficiently, which will expand their reach to a capacity of over 200 million metric tons.
Now, the company is rising up against Adani’s enterprise, ‘Ambuja Cement', which holds the leading position in the industry with a strong capacity of 89 million. Moreover, the financial investment was a success, as the dealers of India Cement were interested in selling their possessions to the company. Although Srinivasan has united the company after his father’s (co-founder, India Cements) demise, Meanwhile, Srinivasan is facing some health issues, and his family is not interested in running the company, which has resulted in some financial problems in recent years. Now, the company is remaking its balance sheets to cover losses, modernize vintage plants, and fulfill working capital needs.
