Key Points:
- Company targets 200 mt capacity by FY26, a year ahead of schedule.
- Maintains strong southern market dominance while expanding growth trajectory.
- Ultratech to cut India Cements stake to 75% for compliance.
Ultratech Cement, India’s largest cement producer and the world’s third-largest outside China, announced on Wednesday that it will sell a 6.49% stake in The India Cements Ltd. through an offer-for-sale (OFS) at a floor price of ₹368 per share. The sale amounts to 2.01 crore shares and is expected to reduce Ultratech’s stake in the Chennai-based cement maker from 81.49% to 75%.
The move, approved at a board meeting held on August 20, comes less than a year after Ultratech Cement acquired a controlling stake in India Cements. Following the sale, the Birla group company will continue to remain the majority shareholder.
Market reaction and deal value
India Cements shares closed nearly 1% lower at ₹370 on the Bombay Stock Exchange following the announcement. At current market prices, the divestment is valued at more than ₹744 crore.
Ultratech Cement initially entered India Cements in July 2024 by acquiring a 32.72% stake from promoters and their associates for ₹3,954 crore. It subsequently launched a ₹3,142.35 crore open offer to acquire an additional 26% from public shareholders, consolidating its position in the southern cement market.
The proposed sale of 2.01 crore shares through the OFS route will help Ultratech bring down its shareholding to 75%, aligning with the regulatory requirement of maintaining at least 25% public float in listed companies.
Expansion strategy and growth targets
Despite the stake dilution, Ultratech Cement continues to pursue aggressive growth plans. Speaking at the company’s annual general meeting on Tuesday, chairman Kumar Mangalam Birla reaffirmed that Ultratech is on course to reach an annual production capacity of 200 million tonnes (mt) in the current fiscal year, one year ahead of its earlier FY27 target.
“With nearly 70% of capital expenditure directed toward expansion, Ultratech is firmly on track to cross 200 mt capacity in FY26,” Birla told shareholders. “This acceleration places us on an even stronger and more sustained growth trajectory for the years ahead.”
As of the June 2025 quarter, Ultratech’s installed domestic capacity stood at 188.8 mt, bolstered by the recent acquisition of Kesoram Industries’ cement business. Including international operations, the company’s total consolidated capacity is around 192 mt.
Industry outlook
Analysts say Ultratech’s partial divestment in India Cements reflects a balance between regulatory compliance and the company’s long-term expansion strategy. While the sale reduces Ultratech’s holding slightly, its 75% stake ensures continued dominance in the southern market, a region where India Cements has historically held strong ground.
The transaction also comes at a time when India’s cement sector is experiencing robust demand, driven by government-led infrastructure projects and a rebound in real estate construction. Industry experts believe that Ultratech’s early achievement of its 200 mt milestone could further consolidate its leadership and widen the gap with competitors.
Ultratech Cement’s decision to pare its stake in India Cements represents both regulatory alignment and strategic capital management, while its accelerated expansion plan underscores the company’s ambition to remain the clear leader in India’s cement industry. With the OFS process in motion and capacity targets being met ahead of schedule, the Birla group company continues to reinforce its long-term growth trajectory.
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