UltraTech Cement acquires 8.7% stake in Star Cement for Rs 851 crore; shares jump 7%- Grow Mudra

UltraTech Cement acquires 8.7% stake in Star Cement for Rs 851 crore; shares jump 7%

27 Dec , 2024 By : Debdeep Gupta

Cement major UltraTech Cement Ltd has announced the acquisition of an 8.69 percent stake in Star Cement Ltd for Rs 851 crore. The deal involves the purchase of up to 3.7 crore equity shares at a price not exceeding Rs 235 per share, excluding taxes and other levies.

Star Cement's promoters and promoter group entities proposed selling their equity holdings, leading to UltraTech Cements' investment decision. The transaction was approved at the UltraTech Cements board meeting earlier on December 27. This move marks UltraTech’s strategic investment in a non-controlling minority stake in the company.

Further, Star Cement saw a large trade as 3.36 crore shares or 8.3 percent equity in the firm worth Rs 766 crore exchanged hands in a block deal window. As a result, shares of Star Cement jumped over seven percent to Rs 247.30 in trade at 9.20 am.

Earlier this month, on December 20, the Competition Commission of India said it had approved UltraTech Cement Limited’s acquisition of India Cements Limited (ICL).

Earlier in July this year, UltraTech Cement had announced the acquisition of a 32.72 per cent stake in India Cements from promoters and their associates in a Rs 3,954 crore deal in a move to expand its footprint in the highly competitive and fast-growing southern cement market, particularly Tamil Nadu.

Besides, it had also announced a Rs 3,142.35 crore open offer to acquire a 26 percent share of ICL from its shareholders.

The Indian cement industry, witnessing consolidation and heightened rivalry between two corporate houses snapping smaller players, pins its hope on 2025 for an improvement in sales realization, higher margins, and acceleration in demand, expecting around 8 percent sales growth helped by increased government spending on big-ticket infra projects.

After a weak October, there was a gradual volume recovery in cement during November. International brokerage CLSA said it remains positive of a demand rebound in 2HFY25 and FY26. Among the cement players, it prefers UltraTech Cement.