2_800x533_L_1412520354.jpg)
Benzinga - The stock price of Aditya Birla-backed UltraTech Cement surged 5.5% on Thursday morning after it said it would pick up a 23% stake in India Cements (NS:ICMN).
What Happened: The largest cement company in India said in a regulatory filing that it will look to buy 7.06 crore shares at ₹267 per share in its competitor, making up a 23% stake in the company. The total value of the transaction will be ₹1885 crore.
The transaction is a non-controlling financial investment, the company said in the statement. The acquisition will be funded fully by cash and will be completed in one month.
CNBC-TV18 reported that India Cements saw a block deal in the pre-market block window. Around 6 crore shares, which make up 19.4% of the equity stake in the company got traded in the block trade.
This acquisition could help prepare UltraTech Cements to take on Adani Group, which is looking to dethrone UltraTech Cement as the top cement company in India.
Earlier in June, Adani-owned Ambuja Cements (NS:ABUJ) bought Penna Cement for ₹10,442 crore. Adani Group is looking to reach a capacity of 140 million tonnes per annum by 2028 and have a market share of 20% to meet the strong domestic demand.
Price Action: Shares of Ultratech Cement (NS:ULTC) surged 5.65% to ₹11,772.85 on Thursday morning.
Read Next: HDFC Bank (NS:HDBK) Share Price Set For Breakout With An Upside Of Up To 38%, Says CLSA