India Cements CEO N Srinivasan Resigns Post UltraTech Acquisition

Team Finance Saathi

26/Dec/2024

What's Covered Under the Article:

Acquisition Details: UltraTech's ₹7,000 crore deal and its implications on India Cements.
Leadership Changes: Resignations of N Srinivasan, family members, and key directors.
Shareholding Impact: UltraTech's majority stake and market performance insights.

In a significant reshuffling of leadership and ownership, India Cements Ltd. has announced the resignation of its CEO N Srinivasan and other board members following the completion of a ₹7,000-crore acquisition by UltraTech Cement Ltd.. The acquisition has cemented UltraTech’s position as the majority shareholder in the Chennai-based company, marking a pivotal moment in India's cement industry.

Details of the Acquisition

The acquisition, approved by the Competition Commission of India (CCI) on December 20, 2024, involved UltraTech Cement acquiring 32.72% of equity shares in India Cements, representing approximately 10.13 crore shares. This was followed by an open offer of 8.05 crore shares, amounting to 26% of the share capital from public shareholders, at a price of ₹390 per share.

With these moves, UltraTech has increased its stake to 55.49%, solidifying its position as the majority shareholder.

Leadership Changes

The acquisition has prompted a complete overhaul of India Cements’ leadership structure:

N Srinivasan, the company's CEO and Managing Director, resigned alongside his daughter Rupa Gurunath, wife Chitra Srinivasan, and board member VM Mohan.
Independent directors, including S Balasubramanian Adityan, Krishna Srivastava, Lakshmi Aparna Sreekumar, and Sandhya Rajan, also stepped down.
CFO R Srinivasan announced his retirement, effective January 1, 2025.

The sweeping changes are expected to align the company’s leadership with UltraTech Cement's strategic vision post-acquisition.

Market Reactions

The stock market responded dynamically to the acquisition news:

India Cements’ shares saw a 1.75% increase, closing at ₹372.55 after Tuesday’s trading session.
UltraTech Cement’s shares, however, experienced a marginal decline, closing 0.63% lower at ₹11,395.55 on the same day.

Industry Implications

The acquisition underscores UltraTech Cement’s ambition to expand its footprint in India’s competitive cement market. By acquiring a controlling stake in India Cements, UltraTech not only boosts its production capacity but also gains access to strategic markets in southern India.

What’s Next for India Cements?

The restructuring of India Cements’ board marks the beginning of a new era under UltraTech’s leadership. Analysts anticipate a shift in operational strategies, focusing on synergy creation and market consolidation.

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