UltraTech Cement Acquires Grinding Unit from India Cements, Announces Expansion Plans

UltraTech Cement, part of the Aditya Birla group, announced the acquisition of a grinding unit from The India Cements Limited for Rs. 315 crore, along with an additional investment of Rs. 504 crore to expand capacity at two existing units. In a stock exchange filing, UltraTech stated that its board approved the acquisition of a 1.1 million tonnes per annum grinding unit, including a captive railway siding at Parli, Maharashtra, from India Cements.

UltraTech explained that this purchase would strengthen its presence in Maharashtra, a rapidly growing market. The company has entered into an Asset Purchase Agreement with India Cements, with Rs 307 crore of the total consideration expected to be received shortly, and the remaining Rs 8 crore to be paid within nine months from the agreement date.

The grinding unit had a turnover of Rs 250.66 crore in the fiscal year ending March 31, 2023, and a net asset value of Rs 75.10 crore. UltraTech noted that the board has also approved a brownfield capacity expansion of 1.2 million tonnes per annum at Parli, post-acquisition, with an investment of Rs 166.4 crore. The expansion at Dhule in Maharashtra, which includes 1.8 million tonnes per annum, is estimated to cost Rs 338 crore. These expansions, expected to be funded from internal accruals, are projected to be completed in FY26, from April 2025 to March 2026.

The expansions aim to cater to future growth, according to UltraTech. India Cements, post this sale, will retain about 13 million tonnes per annum capacity in the southern region and 1.8 million tonnes in Rajasthan. The Banswara unit will have a 1.2-million tonne clinker and a supporting 1.8-million tonne limestone mine.

In a separate announcement, UltraTech received approval from the National Company Law Tribunal (NCLT) in Kolkata for its proposed scheme of amalgamation with its wholly-owned subsidiaries, Ultratech Nathdwara and its subsidiaries, effective from April 1, 2023. The Mumbai bench of the tribunal granted approval last month. The company stated that the amalgamation would streamline the structure, create synergy gains, and fully integrate the Nathdwara unit.

BS