Ace investor Radhakishan Damani, alongside his relatives and investment entities, has significantly profited from his long-term investment in India Cements. On June 27, Damani sold his 23% stake in India Cements to UltraTech Cement, netting a substantial Rs 1,889 crore.
Steady Accumulation Over the Years
Damani’s investment journey in India Cements began years ago, with consistent stake increases over time. According to data compiled by Moneycontrol, the total acquisition price of his stake is estimated to be between Rs 600-700 crore. This figure does not account for the profits or losses incurred from trades between 2015 and 2019, when Damani’s stake fluctuated.
Details of the Deal
On June 27, 2024, Damani and his connected entities executed block deals selling their combined 23% stake in India Cements to UltraTech Cement. The average selling price was around Rs 277 per share. This deal marks a near tripling of Damani’s investment value.
| Details | Information |
|---|---|
| Sale Date | June 27, 2024 |
| Stake Sold | 23% |
| Deal Value | Rs 1,889 crore |
| Average Selling Price | Rs 277 per share |
| Initial Investment | Rs 600-700 crore (approx.) |
Missed Opportunity?
Interestingly, if Damani had waited for UltraTech’s open offer, he could have sold his shares at Rs 390 each, potentially earning Rs 2,694 crore—1.5 times more than the June 27 sale value. This higher price reflects the control premium UltraTech paid to acquire a majority stake from the promoter group.
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Analyst Perspectives
Analysts have mixed views on the impact of UltraTech’s acquisition of India Cements. ICICI Securities notes that this move is likely to drive industry consolidation in South India, increasing the market share of the top five players from 42% to 53%. However, the fragmented market with over 30 players and excess capacity could limit immediate benefits.
Emkay predicts that UltraTech’s grey cement capacity in India will exceed 200 million tonnes by FY27, growing at about 12% annually. This expansion is expected to drive industry-leading volume growth and improve return ratios due to lower operating and capital expenses. Nonetheless, short-term profitability might be constrained by market share competition over the next 4-6 quarters.
Conclusion
Radhakishan Damani’s strategic investments and timely exit from India Cements underscore his acumen as a market veteran. While the deal with UltraTech Cement has brought significant returns, the evolving dynamics of the cement industry in South India will be crucial to watch in the coming years.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
