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India's <keyword id="20884491" type="General" weightage="20" keywordseo="cement-industry" source="keywords">cement industry</keyword> is heating up faster than a kiln! If one’s tracking the sector, the war-like situation between the existing and emerging cement giants is pretty evident. For the uninitiated, Aditya Birla Group-backed <keyword id="19963567" type="General" weightage="100" keywordseo="Ultratech-Cement" source="keywords" meta.keywordsubtype="org" meta.entityname="Ultratech Cement" meta.hostid="261" meta.entityid="Ultratech Cement">Ultratech Cement</keyword> and <keyword id="19955648" type="General" weightage="20" keywordseo="Adani-Group" source="keywords">Adani Group</keyword> have been at loggerheads for increased market share in recent years. And now, JSW Cement also seems to be gearing up to challenge the potential duopoly. As conglomerates aggressively acquire smaller players to achieve market domination, the cement industry in India right now resembles an eighteenth-century battlefield. The battle has significantly escalated this year, but this trend of acquiring regional cement companies can be traced back to 2018 when Ultratech acquired Binani Cement. Since then, both Adani Group and Birla Group have been capturing checkposts all over India, one by one. Ultratech acquired Binani Cement to strengthen its base in the western region and this week, India Cement, for the southern states. Adani has also acquired the Hyderabad-based Penna Cement this year, after acquiring majority stakes in Ambuja Cements and ACC in 2022. But why the obsession with cement? <h2>Why are the Titans clashing for…cement?</h2>India's infrastructure boom is in full swing, and whoever controls the cement supply holds the key to this construction kingdom. Adani Group has been known to follow an acquire &amp; dominate strategy for capturing market segments. <keyword id="19907441" type="General" weightage="20" keywordseo="Aditya-Birla-Group" source="keywords">Aditya Birla Group</keyword>, however, has dominated the cement industry in India through Ultratech for a while now. The answer to the above question may simply lie in establishing the leadership moat for themselves. With even-growing public and private spending on infrastructure, both players want to capture the majority share to dominate the supplies of cement, which is essential for construction. <h2>Where is the sector heading?</h2>While both Adani and Aditya Birla groups have locked horns to acquire CK Birla’s Orient Cement for a while now, a new hurdle threatens their dominance. As per an Economic Times report, Sajjan Jindal-led JSW Cement has now started to evaluate the acquisition of the promoter stake in Orient Cement. As an emerging front, JSW Cement also aims to reach 50 MT per annum by 2030. However, two other major players, Shree Cement and Dalmia Bharat, already have 53 MTPA and 43 MTPA capacity. <div type="image" title="Birla Vs Adani" msid="112196675" hostid="261" sizebytes="284160" caption="&amp;lt;p&amp;gt;Look back at major acquisitions in the cement sector&amp;lt;/p&amp;gt;"></div> However, with over a dozen acquisitions over the last decade, both Ultratech and Adani Group are by far the largest players in the sector eyeing over 200 MT per annum by 2030. <h2>What about the prices?</h2>Will consumers benefit from this cutthroat competition to industry domination? In the short term at least, yes! While lower prices might sound appealing, it's essential to keep an eye on quality as consolidation in the manufacturing sector is always tricky. We don't want to end up with buildings crumbling like cookies. And let's not forget about the little guys. This consolidation of power into a few mega-corporations could squeeze out smaller players, reducing competition and potentially leading to higher prices in the long run. <h2>I think I’ve seen this film before….</h2>The current atmosphere of the cement industry feels reminiscent of what happened in the telecom industry in India in 2016 i.e. the infamous tussle of tariffs. As Reliance Industries launched Jio, it disrupted the entire segment and forced other telecom companies to compete on their terms. As a result, the tariffs fell sharply, companies shut and brands merged, but Jio still claims 40% of the market share in India in terms of subscriber count. Moreover, experts feel that the change in power dynamics in both these industries, cement and telecom, have direct ties to the current government’s industrial policy. Government policies seem to favour companies that have acquired a dominant position in distinct sectors of the economy, which in India’s case are led by two of the richest men in Asia — Gautam Adani and Mukesh Ambani. This strategy of adopting ‘<keyword id="1327299" type="General" weightage="20" keywordseo="national-champions" source="Orion">National Champions</keyword>’ is seemingly inspired by South Korea’s <keyword id="4933297" type="General" weightage="20" keywordseo="Chaebols" source="Orion">Chaebols</keyword> and Japan’s Zaibatsu conglomerates that came into existence decades ago. <h2>From corporate drama to k-drama: Chaebols</h2>The term Chaebol might ring a bell if you've watched K-dramas. They are family-owned business conglomerates in South Korea. This business structure originated in the 1960s and got so popular that it made its way into Korean pop culture. While chaebols have fueled the rapid growth of the Korean economy, concerns about their opaque governance and controlling shareholder interests often deter external investors. Japan’s zaibatsu were also similar financial and industrial conglomerates that were major forces in Japan during World War II. Korea’s Hyundai and Japan’s Mitsubishi are some prime examples of this structure. <h2>Growth of the Goliaths</h2>Viral Acharya, the former Deputy Governor of the RBI, highlights the decade-old trend of the central government achieving economic growth outcomes by working with large conglomerates in part, rather than with state governments. In his conference paper for the Brookings Papers on Economic Activity in March 2023, he demonstrates this pattern with examples from multiple sectors. “By way of specific examples, the share of the Top 5 groups by sales in Civil Engineering and Construction rose from 31% in 2016 to 42% in 2021, in Telecommunications from 65% to over 84%, and in the Retail trade sector from under 44% to over 65%. Similarly, the share of Top-5 groups by Assets rose sharply by 2021 to 68% in the Manufacturing of Basic Metals, 26% in the Manufacturing of Chemicals, 90% in the Manufacturing of Refined Petroleum and Coke, and 47% in the Manufacturing of Non-metallic Mineral Products (including cement and other building materials),” writes Acharya. While this strategy of ‘National Champions’ has benefitted the telecom sector, it has its caveats. The acceleration in the growth may lead to an oligopolistic economy, thereby restricting the entry of new players and stifling innovation. Additionally, a multi-dimensional concentration of power poses the threat of crony capitalism. <h2>National champions: checks and challenges</h2>There’s more to this debate. Arvind Subramanian and Josh Felman, in their paper titled ‘India’s Stalled Rise’ note that the collective impact of this strategy could be more adverse in India, more than anywhere else. They explain that the two big conglomerates — Adani Group and Ambani-led Reliance “have interests that extend throughout the economy, in defence production, ports and airports, energy, natural gas, petroleum, digital platforms, telecommunications, entertainment, media, retail, textiles, financial payments, and education.” Chaebols and Zaibatsu have/had their demerits that range from autocratic decision-making dubbed as ‘imperialistic management’ to the slow inclination of the market towards an oligopolistic structure. However, they weren’t shielded from international competition, nor was this strategy of creating ‘national champions’ shaped using government regulation. They were prevalent in sectors that faced competition internationally, like Hyundai in automobile manufacturing, keeping them in check. The lack of a similar system of checks and balances in India may lead to deeper implications of this strategy of ‘national champions.’ Viral Acharya further notes that they “grew not just at the expense of the smallest firms, but also of the next largest firms” and empirically established a causal link between market power and markups (broadly, profit). At a point when India has seen a monumental shift in infrastructure and looks to capture the market share that China could evacuate, the implications of a tilted policy could prove detrimental. While consolidation can improve performance and catalyse growth, we need to be very careful as a country of the direction we will set ourselves in at this crucial juncture. <h2>Also read:</h2> <div type="Article" hostid="261" msid="112159576" title="India Cement employees to lose jobs after UltraTech acquisition? Chairman Srinivasan answers" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="112163130" title="Ambuja Cements Q1FY25 profit at Rs 789.63 crore; revenue at Rs 8,311.48 crore" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div>

Cementing dominance: Birla vs Adani, of Chaebols, conglomerates, and National Champions

Mumbai, Rising for the second straight session, equity benchmark Sensex climbed 142 points on Thursday following buying in IT and finance stocks amid a positive trend in global markets. After a see-saw session, the 30-share BSE Sensex ended 142.43 points or 0.23 per cent higher at 60,806.22. During the day, the index witnessed a high of 60,863.63 and a low of 60,472.81. The broader <keyword id="372424" type="General" weightage="50" keywordseo="nse-nifty" source="Orion">NSE Nifty</keyword> advanced 21.75 points or 0.12 per cent to finish at 17,893.45. <keyword id="85462" type="General" weightage="50" keywordseo="bajaj-finserv" source="Orion">Bajaj Finserv</keyword> topped the Sensex gainers' chart, rising 2.30 per cent, followed by Asian Paints, Infosys, Bajaj Finance, IndusInd Bank, L&amp;T and TCS. In contrast, Bharti Airtel, <keyword id="6355596" type="General" weightage="50" keywordseo="ultratech-cement" source="Orion">UltraTech Cement</keyword>, <keyword id="42747" type="General" weightage="50" keywordseo="tata-motors" source="Orion">Tata Motors</keyword>, <keyword id="44642" type="General" weightage="50" keywordseo="sun-pharma" source="Orion">Sun Pharma</keyword>, HDFC and Axis Bank were among the laggards, shedding up to 1.03 per cent. The market breadth was positive, with 18 advances and 12 declines. "Traders mostly remained on the sidelines in the absence of any fresh positive triggers, as worries of global slowdown and no signs of any pause on global rate hike cycle continued to weigh on the sentiment. "Although markets were range-bound with a positive bias, fluctuation in the market could continue in the near term," said <keyword id="131488" type="General" weightage="50" keywordseo="shrikant-chouhan" source="Orion">Shrikant Chouhan</keyword>, Head of Equity Research (Retail), Kotak Securities Ltd. In the broader market, the BSE midcap gauge slipped 0.01 per cent and the smallcap index dipped 0.15 per cent. Among sectoral indices, IT climbed 0.88 per cent, technology 0.71 per cent, industrials (0.36 per cent) and Capital Goods (0.26 per cent). Power, telecommunications commodities and realty were among the losers. Markets closed higher for the second consecutive session, aided by buying in IT stocks and despite volatility in Adani group stocks following MSCI review of their free float weights in their indices, said <keyword id="161383" type="General" weightage="50" keywordseo="deepak-jasani" source="Orion">Deepak Jasani</keyword>, Head of Retail Research, HDFC Securities. European stocks rose, after touching nine-month highs on Wednesday as investors pinned hopes on peaking inflation and a major recession now looking less likely on the continent, Jasani added. "Any more-than-expected negative outcome of the MSCI review meeting on Adani company weights in their indices could result in a lower opening of Nifty on Friday," Jasani said. Shares of Adani Power fell 5 per cent to close at 172.90 apiece on BSE after the company on Wednesday reported a 96 per cent decline in consolidated net profit at Rs 8.77 crore for the December quarter. Edible oil major Adani Wilmar Ltd jumped 5 per cent to end at 440.30 per scrip. It has reported a 16 per cent increase in consolidated profit to Rs 246.16 crore for the third quarter. Adani Group's flagship Adani Enterprises crashed 10.72 per cent to settle Rs 1,927.30. Adani Ports and Special Economic Zone dropped 2.90 per cent to Rs 582.05. Adani Transmission and Adani Total Gas witnessed a fall of 5 per cent each, while Adani Green Energy fell 4.96 per cent. The scrip of Ambuja Cements slipped 6.86 per cent to Rs 358, NDTV fell 4.92 per cent to Rs 216.55 and ACC dipped 2.91 per cent to Rs 1,915.95 on the exchange. Elsewhere in Asia, markets in Seoul, Shanghai and Hong Kong ended with gains, while Tokyo settled in the red. However, equity exchanges in Europe were trading in the positive territory in the afternoon session. Wall Street had ended lower in the overnight session. The rupee closed flat at 82.54 against the US dollar on Thursday. International oil benchmark Brent crude was trading 0.29 per cent higher at USD 85.34 per barrel. Foreign Institutional Investors (FIIs) were net sellers in capital markets as they offloaded shares worth Rs 736.82 crore on Wednesday, according to exchange data.

Sensex, Nifty clock gains with buying in IT and finance stocks

Equity benchmarks started the trade on a positive note on Friday, with the <keyword id="6484188" type="General" weightage="100" keywordseo="sensex" source="Orion">Sensex</keyword> climbing over 113 points in <keyword id="51932" type="General" weightage="20" keywordseo="early-trade" source="Orion">early trade</keyword>, amid mixed trends from global equities. The 30-share BSE index advanced 113.2 points to 60,411.20 in early deals. The broader NSE <keyword id="6354813" type="General" weightage="80" keywordseo="nifty" source="Orion">Nifty</keyword> climbed 35.7 points to 17,992.20. Later, both the benchmark indices turned volatile, with the Sensex and the Nifty swinging between gains and losses. From the Sensex pack, <keyword id="43217" type="General" weightage="50" keywordseo="tech-mahindra" source="Orion">Tech Mahindra</keyword>, Kotak Mahindra Bank, Wipro, Tata Consultancy Services, Larsen &amp; Toubro, HCL Technologies, <keyword id="6354512" type="General" weightage="50" keywordseo="infosys" source="Orion">Infosys</keyword>, Titan, Sun Pharma and <keyword id="6355596" type="General" weightage="50" keywordseo="ultratech-cement" source="Orion">UltraTech Cement</keyword> were among the major gainers in early trade. On the other hand, IndusInd Bank, Power Grid, ICICI Bank, NTPC and <keyword id="6354731" type="General" weightage="50" keywordseo="state-bank-of-india" source="Orion">State Bank of India</keyword> were among the biggest laggards. In Asia, markets in Seoul and Shanghai were trading lower, while Tokyo and Hong Kong quoted in the green in mid-session deals. Markets on the Wall Street had ended higher on Thursday. The BSE benchmark index had ended 37.87 points or 0.06 per cent higher at 60,298 on Thursday. The Nifty gained 12.25 points or 0.07 per cent to settle at 17,956.50. Meanwhile, the international oil benchmark Brent crude was trading 0.38 per cent lower at USD 96.21 per barrel. <keyword id="6438315" type="General" weightage="50" keywordseo="foreign-institutional-investors" source="Orion">Foreign Institutional Investors</keyword> (FIIs) offloaded shares after many days as they sold shares worth Rs 1,706 crore on Thursday, according to exchange data. "The market momentum which pushed the Nifty up by 18 per cent from the June lows is likely to face some headwinds from now on. The sudden sharp spike in the dollar index will impact capital flows to emerging markets like India. The consistent FII buying seen in August is likely to lose steam impacting sentiments," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/mahindra-scorpio-classic-vs-mahindra-scorpio-n-price-variants-and-features-compared/slidelist/93654717.cms">Mahindra Scorpio Classic vs Mahindra Scorpio-N: Price, variants, and features compared</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/google-to-reduce-low-quality-unoriginal-content-in-search-results/articleshow/93652179.cms">Google to reduce 'low-quality, unoriginal' content in Search results</a>

Sensex climbs 113 points in early trade, amid mixed global trends

Equity benchmark Sensex resumed its record-setting streak on Thursday after a day's pause as gains in index major TCS offset profit-booking in the IT pack following strong results by <keyword id="6354512" type="DOMAIN" weightage="20" keywordseo="Infosys">Infosys</keyword> and Wipro. A broad upmove in global equities and a recovering rupee further propped up the bourses, traders said. Recovering from a shaky start, the 30-share BSE Sensex gained momentum during the day to end at its new lifetime high of 49,584.16, up 91.84 points or 0.19 per cent. Similarly, the broader NSE Nifty rose 30.75 points or 0.21 per cent to finish at a record 14,595.60. TCS topped the Sensex gainer's chart, spurting 2.89 per cent, followed by IndusInd Bank, L&amp;T, ITC, <keyword id="6355199" type="DOMAIN" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword>, HUL and <keyword id="44642" type="DOMAIN" weightage="20" keywordseo="Sun-Pharma">Sun Pharma</keyword>. On the other hand, <keyword id="141968" type="DOMAIN" weightage="20" keywordseo="HCL-Tech">HCL Tech</keyword>, Axis Bank, <keyword id="106317" type="DOMAIN" weightage="20" keywordseo="Asian-Paints">Asian Paints</keyword>, <keyword id="6355596" type="DOMAIN" weightage="20" keywordseo="ultratech-cement">UltraTech Cement</keyword>, Infosys and Tech Mahindra were among the laggards, declining up to 2.63 per cent. Infosys on Wednesday posted a 16.6 per cent rise in consolidated net profit at Rs 5,197 crore for the December 2020 quarter, and increased its revenue growth guidance for FY21 to 4.5-5 per cent on the back of large project wins and strong deal pipeline. Wipro posted an about 21 per cent jump in consolidated net profit at Rs 2,968 crore for the December 2020 quarter, and said the demand environment is improving steadily. Domestic equities witnessed a brisk recovery from the day's low mainly led by a rebound in FMCG and pharma stocks, said Binod Modi, Head- Strategy at Reliance Securities. IT index has been the most surprising as profit-booking was visible in many IT stocks despite strong Q3 numbers and upbeat guidance shared by the managements, he added. "We believe underlying strength of the market remains intact and any correction in the market is likely to be bought out. Sustained recovery in key economic data for Dec'20, better-than-expected 3Q FY21 corporate earnings so far and upbeat managements' commentaries continue to augur well for the market," he said. BSE capital goods, oil and gas, energy, healthcare, FMCG and industrials indices rose up to 1.67 per cent, while metal, basic materials, consumer durables, bankex, teck, finance and IT closed with losses. Broader BSE midcap and smallcap indices jumped up to 0.29 per cent. On the macroeconomic front, the wholesale price-based inflation moderated to 1.22 per cent in December as prices of kitchen staples onion and potato eased, government data showed on Thursday. Meanwhile, Fitch Ratings said the Indian economy will suffer lasting damage from the coronavirus crisis, with growth slowing down after an initial strong rebound next fiscal. Global markets looked beyond US President Donald Trump's record second impeachment and focussed on his successor Joe Biden's proposed USD 2 trillion stimulus programme. Elsewhere in Asia, bourses in Hong Kong, Seoul and Tokyo ended in the positive territory, while Shanghai was in the red. Stock exchanges in Europe were also trading with gains in early deals. The global oil benchmark Brent crude was trading 0.12 per cent lower at USD 55.99 per barrel. The rupee gained for the third straight day and closed 11 paise higher at 73.04 against the US dollar. Foreign institutional investors remained net buyers in the capital markets, snapping up shares worth Rs 1,879.06 crore on Wednesday, according to provisional exchange data. SEE ALSO:<a href="https://www.businessinsider.in/tech/apps/news/the-indian-government-may-call-whatsapp-to-explain-why-its-new-data-sharing-terms-apply-in-india-but-not-in-europe/articleshow/80262586.cms" data-type="tilCustomLink"> The Indian government may call WhatsApp to explain why its new data privacy policy applies in India but not in Europe</a> <a href="https://www.businessinsider.in/politics/world/news/trump-becomes-first-president-to-be-impeached-twice-as-house-charges-him-with-inciting-an-insurrection/articleshow/80260200.cms" data-type="tilCustomLink">Trump becomes first president to be impeached twice as House charges him with inciting an insurrection</a>

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Cementing dominance: Birla vs Adani, of Chaebols, conglomerates, and National Champions

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Sensex, Nifty clock gains with buying in IT and finance stocks

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Sensex climbs 113 points in early trade, amid mixed global trends

PTI

TCS, RIL push the market to new records — Nifty inches closer to 14,600

PTI

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