UltraTech Cement: UltraTech’s open offer for India Cements oversubscribed

Mumbai: UltraTech Cement’s open offer for subsidiary India Cements has seen a rare oversubscription, thanks to its high offer price. Less than 5% open offers launched since 2015 in the country have been fully subscribed, data compiled by ET showed.

The ₹390-per-share offer, open from January 8 to 21, was subscribed 110%. It will increase UltraTech’s stake in India Cements to 81.49%. India Cements’ shares closed at ₹295.15 on Friday, marking a nearly 22% gain in a year.

“They were offering a very good value compared to the price at which they bought from the Damanis. So, ideally, anyone who has bought the shares at Rs 300 or below would like to tender their shares,” said Mangesh Bhadang, analyst at Centrum Broking. UltraTech will now have to pare its holding in India Cements to less than 75% to comply with market regulator Securities and Exchange Board of India’s minimum public shareholding norms. “We will now hold about 81.49% equity in the company, and there are regulatory processes to be followed to bring it down to 75%, which we will be doing as per timelines allowed,” UltraTech Cement chief financial officer Atul Daga said.

TURNAROUND
The Aditya Birla Group company is aiming a turnaround in the performance of India Cements in 12 months from now. “We have started engaging with our team at ICL (India Cements Ltd) and studying the opportunities that lie before us,” Daga said. “The initial review gives us an opportunity of de-bottlenecking some of the capacities, two or three plants, as well as some brownfield expansion opportunities exist in another two or three plants,” he said.