September 08, 2024 23:34 (IST)
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India Cements Takeover by UltraTech Cement won't hit jobs, Srinivasan assures India Cements' staff
Chennai/IBNS: N. Srinivasan, the vice chairman and managing director of India Cements, has assured his employees that the company's takeover by UltraTech Cement will not impact their career.
Srinivasan also told the India Cement staff that their future is in safe hands and that they need not feel threatened.
"The change (from India Cements to UltraTech) does not mean a change in your career. I have been assured. I spoke to the chairman of Birla Group and he said that they will follow the same policy that we have been doing so far," Srinivasan told the employees in a 13-minute video address on Sunday (July 28), after the company's board meeting.
"There will be space for everybody. They will not witch hunt anybody and good workers will be rewarded," the industry veteran added.
Tracing the history of 75-year-old India Cements, Srinivasan revealed the reason for selling the leading cement manufacturing firm in south India.
"Our competitors thought they can crush us with low prices, (while we were facing) with slightly higher cost of production. We had taken all steps to reduce our costs," he said.
"Meanwhile, we were dependent upon an investor, who was to pick up a lot of our surplus land and therefore, relieve us of many problems. But that did not happen and therefore, we thought of a solution to sell the company," Srinivasan added.
Earlier on Sunday (July 28), the Aditya Birla Group-owned UltraTech Cement said that its board of directors had approved the acquisition of a 32.72 percent equity stake of the promoters and their associates in India Cements for Rs 3,954 crore at Rs 390 per share.
The price is 4.1 percent higher than India Cements share’s closing price of Rs 374.60 apiece last Friday (July 26), according to reports.
UltraTech Cement, earlier in June 2024, had made a financial investment in N. Srinivasan-headed India Cements to acquire 22.77 percent equity at a price of Rs 268 per share.
With the latest announcement of 32.72 percent acquisition, UltraTech Cement will become the majority shareholder in India Cements with a holding of 55.49 percent stake.
UltraTech Cement said in a stock exchange filing that the stake sale will also trigger a mandatory open offer, and both the stake sale and open offer will be subject to regulatory approvals.
The acquisition of India Cements, which has a total capacity of 14.45 million tonnes per annum (mtpa) of grey cement, including 12.95 mtpa in Tamil Nadu and 1.5 mtpa in Rajasthan, will add 9 percent to UltraTech Cement’s current capacity and augments its capacity share by 2 percent on a pan-India basis.
After the acquisition, UltraTech Cement’s cement capacity would increase to 214 MT, including Kesoram, by FY27E from the current 156 MT ex-Kesoram.
According to industry experts, the increased consolidation in the cement industry is expected to benefit the top two groups in terms of market share.
India Cements sale to not affect N. Srinivasan-owned Chennai Super Kings
UltraTech Cement's proposed acquisition of India Cements has stirred interest beyond the business domain, but it has become clear that the deal will not affect cricket, and Chennai Super Kings (CSK), one of the most successful IPL teams, will continue to be owned by N. Srinivasan and his family, according to reports.
CSK is now an independent entity, separate from India Cements, owned by approximately 1,00,000 shareholders of the Chennai-based firm, reports Firstpost, adding that CSK separated from India Cements around 2015, with shares of the IPL franchise distributed among the shareholders of India Cements at the time, while the majority and controlling stake remained with the N. Srinivasan family.
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