UltraTech Cement to buy 8.69% stake in Star Cement for Rs 851 crore
Agencies
Synopsis
UltraTech Cement has approved acquiring around 8.69% stake in Star Cement for up to Rs 851 crore. UltraTech's board agreed to purchase up to 3.70 crore shares at ₹235 per share plus additional charges. Previous rumors about Ambuja Cement acquiring Star Cement were denied as speculative.
By ET Online
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UltraTech Cement's board has approved acquiring approximately 8.69% stake in Star Cement for a value not exceeding Rs 851 crore, the company said in an exchange filing. The nod for the acquisition comes close on the heels of UltraTech Cement completing the acquisition of 32.72% stake in India Cements, as they look to cement leadership in the industry amid growing threats from the Adani Group.
Some promoters and promoter group entities of Star Cement had proposed to sell their equity holdings and approached UltraTech.
Star Cement, a leading force in the Northeast cement market, operates with a current installed capacity of 7.7 million tonnes per annum (mtpa). Its facilities include an integrated plant in Meghalaya and four grinding units. The company aims to scale up its production capacity to 25 mtpa by 2030.
Shares of Star Cement jumped 8% to Rs 247.75 on the BSE in initial trade on Friday. UltraTech's shares were up 0.5%, while BSE Sensex rose 500 points in early trade.
Media reports had earlier said Ambuja Cement, a subsidiary of the Adani Group, was in talks to acquire Star Cement as part of its expansion strategy in the North East, where Star Cement holds a significant market share.
However, Star Cement had dismissed reports. The company said the reports were speculative and clarified that no such discussions were underway.
The acquisition is expected to be completed in one month and wil be an all cash deal.
Incorporated in 2001, Star Cement's turnover in fiscal year 2024 stood at Rs 2,910.66 cores, up from Rs 2,704.84 crore in FY23 and Rs 2,221.81 crore in FY22.
UltraTech is the largest producer of cement in the country.
India's cement industry is seeing increasing acquisition deals in recent years, largely by Adani and UlraTech, while India sets ambitious targets to ramp up its infrastructure. The Adani Group shook up the cement industry in 2022, instantly becoming the second-largest player by acquiring Ambuja Cements Ltd. and ACC Ltd.
Prime Minister Narendra Modi's push for massive infrastructure development—covering airports, power plants, roads, bridges, and tunnels—is set to drive India’s infrastructure investment to ₹15 trillion ($179.2 billion) by March 2026, according to Crisil Ratings.
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UltraTech Cement's Board of Directors met on December 27 and approved a plan to invest in Star Cement. They will acquire up to 3.70 crore equity shares at a price of no more than ₹235 per share, excluding taxes, stamp duty, and other charges.Some promoters and promoter group entities of Star Cement had proposed to sell their equity holdings and approached UltraTech.
Star Cement, a leading force in the Northeast cement market, operates with a current installed capacity of 7.7 million tonnes per annum (mtpa). Its facilities include an integrated plant in Meghalaya and four grinding units. The company aims to scale up its production capacity to 25 mtpa by 2030.
Shares of Star Cement jumped 8% to Rs 247.75 on the BSE in initial trade on Friday. UltraTech's shares were up 0.5%, while BSE Sensex rose 500 points in early trade.
Media reports had earlier said Ambuja Cement, a subsidiary of the Adani Group, was in talks to acquire Star Cement as part of its expansion strategy in the North East, where Star Cement holds a significant market share.
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However, Star Cement had dismissed reports. The company said the reports were speculative and clarified that no such discussions were underway.
The acquisition is expected to be completed in one month and wil be an all cash deal.
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Incorporated in 2001, Star Cement's turnover in fiscal year 2024 stood at Rs 2,910.66 cores, up from Rs 2,704.84 crore in FY23 and Rs 2,221.81 crore in FY22.
UltraTech is the largest producer of cement in the country.
ADVERTISEMENT
India's cement industry is seeing increasing acquisition deals in recent years, largely by Adani and UlraTech, while India sets ambitious targets to ramp up its infrastructure. The Adani Group shook up the cement industry in 2022, instantly becoming the second-largest player by acquiring Ambuja Cements Ltd. and ACC Ltd.
Prime Minister Narendra Modi's push for massive infrastructure development—covering airports, power plants, roads, bridges, and tunnels—is set to drive India’s infrastructure investment to ₹15 trillion ($179.2 billion) by March 2026, according to Crisil Ratings.
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