India Cements soars 10% as UltraTech to buy 23% stake; up 26% in 2 days

UltraTech Cement's board has approved making a financial investment to purchase up to 70.6 million equity shares of The India Cements

UltraTech Cement, India Cements stake news: Shares of India Cements (ICL) hit a fresh 52-week high of Rs 289.20 as they rallied 10 per cent on the BSE in Thursday's intraday trade. The counter saw numerous block deals after cement giant UltraTech Cement announced its plan to invest around Rs 1,885 crore in The India Cements.

In the past two trading days, the stock of India Cements has zoomed 26 per cent. It is trading at its highest level since September 2022.

In an exchange filing, UltraTech Cement said the board of directors of the company has approved making a financial investment to purchase up to 70.6 million equity shares of The India Cements Limited, at a price of up to Rs 267 per share. This non-controlling financial investment constitutes around 23 per cent of the equity share capital of ICL.

 

At 09:30 AM, The India Cements share price were trading nearly 9 per cent higher at Rs 285.55 as compared to 0.22 per cent decline in the BSE Sensex. As many as 106.53 million shares, representing 34.37 per cent of total equity of ICL, have, thus far, changed hands on the NSE and BSE.

As on March 31, 2024, resident individual shareholders held 39.33 per cent stake in ICL. Of these, Radhakishan Shivkishan Damani and Gopikishan Shivkishan Damani collectively held 20.78 per cent stake in the company, shareholding data pattern shows.

Meanwhile, shares of UltraTech Cement hit a record high of Rs 11,865 as they surged 6 per cent on the BSE in intraday trade. The stock was trading higher for the fourth straight day, having rallied 11 per cent during the period. Thus far in the month of June, it has zoomed 20 per cent.

Fundamentally, the economy is projected to sustain robust growth buoyed by the forecast of above normal rainfall, which may prop up rural demand, coupled with strong domestic demand and sectoral growths.

After Lok Sabha Elections and Assembly elections in some states, the Centre and states are expected to retain their focus on the development agenda, ICL had said on industry outlook while announcing Q4 results on May 20.

The construction activity is expected to be brisk in the coming months driven by continued infrastructure spending by the Government, private sector housing, and commercial segments. This presents a healthy demand outlook for the company and the industry. Given this, the company has built adequate capacity to meet the firm demand, especially in the South.

"At the same time, increasing cost pressure, high cost of logistics, and severe competition in the market are also key overhangs which may affect the margins," ICL had said.