UltraTech Cement Acquires 8.69% Stake in Star Cement for ₹851 Crore

UltraTech Cement Ltd., India’s leading cement producer in terms of capacity, has bought 8.69 percent of shares being transferred from the promoter group to UltraTech for a consideration of ₹851 crore. The shares were acquired at ₹235 each via a block deal, according to a December 27, 2024 exchange filing.

As clarified by the company itself, a minority stake does not control Star Cement, which is headquartered in Meghalaya, a northeastern Indian state; the turnover for the last fiscal year for Star Cement stood at ₹2,910 crore.

This acquisition forms part of its large-scale growth strategy. Just earlier this week, UltraTech set up the acquisition of a substantial stake in India Cements 32.72%, an acquisition that increased production in India Cements from which an open offer is to be made at ₹390 per share. Consequently, India Cements became a subsidiary of UltraTech, with production capacity now added at 14.5 million tonnes.

Star Cement has a grinding capacity of 7.7 million tonnes per annum (MTPA) and a clinker capacity of 6.1 MTPA. The company has a strong distribution network-Virtually 2,000 dealers and over 12,500 retailers Star Cement claimed a 26.5 percent market share in the northeastern market, having premium sales account for 10.6 percent of total sales.

A passage is delineated towards six limestone blocks in Beawar, Rajasthan, with Star Cement named the preferred bidder expected to have 63.9 million tonnes of limestone reserves spread across 95.68 hectares. There is also a proposed expansion in Assam that will see plants come up in Silchar and Jorhat districts. There is a capital expenditure of about₹380 crore planned for the second half of the current fiscal year.

Post this announcement, shares in Star Cement gained around 7% at ₹245.23, giving its 2024 price growth 40%. Meanwhile, UltraTech’s stock opened 0.3% higher at ₹11,497, having risen 10% this year.