Mumbai, Oct 5  The board of UltraTech Cement will meet Tuesday to take a call on the proposal to consolidate all cement units and divisions of the Aditya Birla group into one entity, named Samruddhi.

Apart from UltraTech Cement, which was acquired from Larsen and Toubro, the Aditya Birla group has several cement units under its fold, notably Grasim.

The Grasim board has already approved a proposal that will enable the company to directly hold 35 percent in Samruddhi, a wholly-owned subsidiary of the Aditya Birla group, which will see its holding drop to 65 percent post-consolidation.

"This is part of Grasim's continuing efforts to improve shareholder value in keeping with its record of outperforming the Sensex and its peers over the past 10 years," group chairman Kumar Mangalam Birla said.

The development, however, saw Grasim shares fall sharply by 5.7 percent to Rs. 2,546.80, while that of UltraTech dropped 1.57 percent to Rs. 835.55, as investors felt the deal was rather complicated and were uncertain if the demerger would be able to unlock shareholder value.

Under the demerger scheme, Grasim will transfer its cement business, including related business (excluding its investment in UltraTech) to Samruddhi, according to a regulatory statement by UltraTech Cement.

In return, Samruddhi will issue one equity share of Rs. 5 face value to the shareholders of Grasim, the statement added.

Samruddhi will be isted following this. (IANS)