India Cements Managing Director, N Srinivasan, told employees on Monday that the decision to sell their stake to UltraTech Cement was due to cost pressures, price wars, and the inability to sell some land. These factors added extra pressure on the company.
“We tried to reduce our costs and hoped an investor would buy our land, which would have solved many problems. But that didn’t happen, so we decided to sell the company,” Srinivasan said in a video address.
Srinivasan also spoke about India Cements’ long history, including the contributions of its founder, SNN Sankaralinga Iyer, who helped secure limestone mining licenses.
Analysts say UltraTech Cement’s acquisition of India Cements will boost its leadership position and strengthen its presence in the Southern market. However, the Southern cement market will remain fragmented with over 30 players.
ICICI Securities noted that the top five players will now control 53% of the market share, up from 42%. UltraTech’s capacity share will increase from 12% to 23% with the addition of India Cements and Kesoram Industries, making it the largest player in South India.
Motilal Oswal reported that the industry is moving towards greater consolidation, which should improve cement prices in the long term. On Monday, shares of India Cements remained flat at ₹374.30 on the NSE, while UltraTech Cement’s shares rose 2% to ₹11,898.10.
