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UltraTech Cement shares will be in focus as the company plans to acquire Wonder WallCare, a wall putty manufacturer, for an enterprise value of up to Rs 235 crore as part of its expansion strategy. The acquisition will strengthen UltraTech’s portfolio of value-added products.Wonder WallCare, a wholly owned subsidiary of Wonder Cement, operates a manufacturing plant for wall putty and related products with a capacity of 600,000 tonnes per annum, located in Rajsamand, Rajasthan.
One of the largest single-location putty manufacturing plants in the country, the facility was constructed in 2022–23 and offers potential for further expansion, UltraTech said in a filing with the stock exchanges on Thursday.The deal is expected to be closed within 90 days, subject to regulatory approvals and compliance. Wonder WallCare reported a turnover of Rs 78.
61 crore in FY 2023–24, up from Rs 20.36 crore in the previous fiscal.Also Read: Stocks in news: HDFC Bank, Mazagon Dock, Bajaj Finance, DMart, UltraTech Cement“This acquisition will help the company expand its putty and value-added products’ production capacity in the highly competitive and fragmented putty manufacturing market in India,” UltraTech said.
Wonder WallCare’s plant is located near large reserves of high-quality raw materials and is in close proximity to UltraTech’s existing putty manufacturing facilities in Rajasthan.UltraTech currently has a grey cement capacity of 188.76 million tonnes and a white cement/putty capacity of 2.
7 million tonnes. It operates three wall care putty units and markets the product under the ‘Birla White’ brand.Also Read: RBI puts Bajaj Fin on notice over co-branded cardsIn December 2023, UltraTech acquired an 8.
69% stake in Meghalaya-based cement maker Star Cement from its promoter group for Rs 851 crore. The deal provided UltraTech with a foothold in the north-eastern market and access to one of the region’s most profitable cement companies.In June last year, UltraTech acquired a 22.
77% stake in India Cements. While initially described as a financial investment, UltraTech later took control of the business from N. Srinivasan and his family and now holds an 81.
49% stake.UltraTech also acquired the cement business of Kesoram Industries in late 2023.India’s top two cement producers — UltraTech Cement of the Aditya Birla Group and Adani Cement of the Adani Group — have been aggressively expanding their capacities in recent months as they look to consolidate dominance in the world’s second-largest cement market.
At UltraTech’s annual general meeting in 2023, Chairman Kumar Mangalam Birla said the company would surpass 200 million tonnes in production capacity. In 2024, Birla reaffirmed that UltraTech was on track to cross this milestone by FY 2026–27 through ongoing expansions and acquisitions of Kesoram Cement and India Cements.The company is expected to commission an additional 26.
5 million tonnes of capacity over the current and next fiscal years.Also Read: Gold, not Bitcoin, is the real threat to the Dollar, says Peter SchiffMeanwhile, Adani Cement aims to reach a production capacity of 140 million tonnes by 2027–28. The group acquired Swiss cement major Holcim in 2022, gaining nearly 70 million tonnes of capacity.
Other major acquisitions include Sanghi Industries, Penna Cement Industries, and Orient Cement.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times).
