UltraTech Cement on Friday announced the purchase of 8.69 per cent in Meghalaya-based Star Cement for ₹851 crore.
The latest buy is yet another indication of its rivalry with the Adani group with both the conglomerates engaging in a mix of organic expansions and acquisitions to dominate India’s cement sector.
UltraTech Cement is currently the country’s largest cement maker. It has an installed capacity of 156.66 million tonnes of grey cement. The Kumar Mangalam-Birla led firm intends to ramp up this capacity to 200 million tonnes by 2026-27.
Star Cement has an installed capacity of 7.7 million tonnes and it has presence in the North-Eastern markets. It is also expanding in the eastern markets of West Bengal and Bihar. It is the largest cement brand in North East India.
UltraTech Cement said in a regulatory filing that ``some promoter and promoter group entities’’ of Star Cement “propose to sell their equity holding in Star Cement and have approached the company for the same”.
“The board of directors of the company at its meeting held on Friday considered
the proposal and approved making an investment to acquire non-controlling
minority stake up to 3.70 crore equity shares of Star Cement at a price not exceeding
₹235 per share, excluding
STT, stamp duty and other
levies,” it added.
It further disclosed that the cost of acquisition or the price at which shares are acquired, will “not exceed ₹851 crore, excluding STT”.
A PTI report said that UltraTech Cement will pick up stakes from Rajendra Chamaria and his family’s holdings, who form part of the promoter group.
However, it is only the Chamaria family which is selling its stake in the company, while the other promoters remain committed and are not divesting any shares.
The promoters held 66.47 per cent of Star Cement for the period ended September 30, 2024.
Shares of Star Cement on Friday finished at ₹232.05 on the BSE, a gain of 1 per cent over the last close.
UltraTech Cement’s latest announcement comes three days after the firm completed the acquisition of a controlling stake in India Cements Ltd.
On the other hand, Ambuja Cements bought Saurashtra-based Sanghi Industries, Penna Industries and recently announced the acquisition of CK Birla group firm Orient Cement.