UltraTech CemCo, the AV Birla group acquired cement business of Larsen & Toubro, is set to be rechristened UltraTech Cement. The Birla group firm Grasim Industries concluded the acquisition for Rs 2,200 crore (Rs 22 billion) nearly three months ago.
"The name is being changed to avoid confusion over the CemCo word. We will use 'cement' word in the name to make things more clearer with regard to the business in which we are in," said J P Nayak, board member, L&T. Nayak is also on UltraTech's board.
UltraTech is in the process of launching its cement brand. "The brand would be launched when cement demand starts picking up," said Nayak without disclosing the name of the brand. After a slowdown during June-September due to the monsoon, cement demand starts picking up from October.
Sources close to the development told Business Standard, "UltraTech Cement represents a more focussed venture. However, the new name has yet to be approved by the shareholders. The proposal pertaining to the name change will place before the shareholders at an EGM soon."
Grasim controls a 51 per cent stake in UltraTech CemCo, which makes it the largest cement company in the country with a combined capacity of 31 million tonne per annum. UltraTech has a rated capcity of 17 million tonne.
Grasim had made an open offer for a 30 per cent stake in UltraTech at the rate of Rs 342.6 a share, which was fully subscribed.
After the completion of the open offer, Grasim's holding in UltraTech increased to 42.6 per cent. The company then bought 8.5 per cent shares of UltraTech from Larsen & Toubro, to acquire management control in UltraTech.
As per the deal between Grasim and L&T, Grasim's 14.95 per cent share in L&T was transferred to the L&T Employees Welfare Foundation.
The foundation bought Grasim's stake for Rs 446.4 crore (Rs 4.46 billion). Grasim still holds a balance of 0.7 per cent in L&T, which is expected to be divested in the near future.