How DMart's Radhakrishna Damani lost out on Rs 800 crore in the Ultratech-India Cements deal

Renowned investor and founder of retail giant D-Mart, Radhakishan Damani, recently sold his stake in India Cements to UltraTech. This transaction took place on June 27, with each share priced at Rs 270, amounting to a total transaction value of Rs 1,889 crore. Damani, along with his brother and associate companies, held a 23% stake in India Cements. They began gradually increasing their stake in the company after 2015, so the average purchase price of the shares can only be estimated. According to a Moneycontrol report, their acquisition value was between Rs 600-700 crore.

This means that Damani and his associates made nearly three times their investment from this deal. However, if Damani had waited another month, his profit could have increased by approximately Rs 800 crore. After June 27, UltraTech began purchasing shares in India Cements again, buying Rs 3,954 crore worth of shares. This increased UltraTech's stake in India Cements to 55.49%, with shares purchased at Rs 390 each.

Radhakishan Damani and his associates earned Rs 1,889 crore from selling their shares at Rs 277 per share. Had Damani waited an additional month, he could have sold at Rs 390 per share, resulting in Rs 2,694 crore and an extra ₹805 crore in profit.

The acquisition of India Cements could benefit UltraTech Cements in South India. According to ICICI Securities, this would consolidate the cement market in South India, giving five companies a 53% market share. The brokerage also noted that while this acquisition may not benefit UltraTech in the near future due to the presence of over 30 players with significant capacity in the market, it holds potential long-term advantages.