The India Cements Ltd. (ICL) has inked a deal to acquire Springway Mining Private Limited. The share acquisition will happen in a phased manner. According to ICL, the transaction would involve a total consideration of ₹82.89 crore.
Incorporated in 2010, Springway has a paid-up capital of ₹20 crore.
Springway is engaged mainly in the mining and quarrying business. ICL, a leading cement manufacturer in the country, said the acquisition was done with an eye on setting up a cement plant in Madhya Pradesh.
According to sources, ICL is planning a clinker grinding unit in East Nimar district of Madhya Pradesh. The proposed 1.5 million tonne unit is expected to involve an investment of a little over ₹300 crore.
Vice-chairman and managing director of ICL N. Srinivasan had indicated recently that the company could be contemplating capacity expansion in view of the pick-up in cement demand in the wake of Centre-initiated spending on infrastructure projects and also due to various initiatives undertaken by States across the country.
Capacity constraints
The move to buy Springway must be read in this context. Mr. Srinivasan has been of the view that capacity constraints following a surge in demand would drive cement producers to expand. Availability of limestone is critical for expansion, especially to the south of Vindhyas. The ICL acquisition of a mining business in Madhya Pradesh makes enormous logical sense, according to industry sources. Modalities of funding the acquisition were being worked out, they said.
