Demerger of Cement Business of Kesoram Industries Limited into UltraTech Cement Limited 

The Board of Directors of UltraTech has approved a draft scheme of arrangement for the acquisition of Kesoram’s cement business undertaking. This scheme is subject to regulatory approvals.

30th November, 2023: Kesoram Industries Limited (“Kesoram”) has decided to demerge its ‘Cement Business’ and has approached UltraTech Cement Limited (“Company” or “UltraTech”) in relation to the same. The Board of Directors of UltraTech, at its meeting held today, considered Kesoram’s proposal and approved a Scheme of Arrangement amongst Kesoram, the Company and their respective shareholders and creditors (“Scheme”). In terms of the Scheme, Kesoram will demerge its Cement Business into UltraTech.

The Cement Business of Kesoram consists of 2 integrated cement units at Sedam (Karnataka) and Basantnagar (Telangana) with a total capacity of 10.75 mtpa. Out of this total capacity, 8.50 mtpa is clinker backed and 2.25 mtpa is surplus grinding capacity. The cement business also has a 0.66 mtpa packing plant in Solapur, Maharashtra.

Under the demerger scheme, UltraTech will issue 1 equity share of the face value of Rs.10/- each for every 52 equity shares of Kesoram of face value Rs. 10/- each as recommended by the valuers and accepted by the Board.

For the purpose of this transaction, 59,74,301 new equity shares of the Company will be issued to the shareholders of Kesoram as on the record date as defined in the Scheme. This will increase UltraTech’s equity capital to Rs. 294.66 crores consisting of 29.47 crore equity shares of Rs. 10/- each.

The transaction will provide UltraTech with the opportunity to extend its footprint in the highly fragmented, competitive, and fast growing Western and Southern markets in the country. It will help enhance UltraTech’s geographic reach in Southern markets such as Telangana where UltraTech currently does not have any cement manufacturing plant. The operations will be bolstered by economies of scale resulting from synergies in procurement, logistics and fixed costs.

The transaction is subject to the approval of shareholders and creditors, stock exchanges, NCLT, CCI and other regulatory authorities as may be required. The transaction is expected to be consummated within 9-12 months subject to above regulatory approvals.

Bansi S. Mehta Valuers LLP and PwC Business Consulting Services LLP, registered valuers are the independent joint valuers, ICICI Securities Limited has provided an opinion on fairness of the valuation; Khaitan & Co, Mumbai are the legal advisors and Trilegal will be advising on Competition Law matters.

Upon consummation of this Scheme of Arrangement, UltraTech’s cement capacity will stand augmented to 149.14 mtpa including its overseas operations.

The proposed transaction will accelerate the Company’s path to achieving its stated goal of 200 mtpa cement capacity in India, reaffirming its belief in the Country’s growth potential.

About UltraTech Cement Limited

UltraTech Cement Limited is the cement flagship company of the Aditya Birla Group. With revenues of USD 7.2 billion, UltraTech is the third largest Cement producer in the world, outside of China, with a total Grey Cement capacity of 137.85 MTPA.