Cement manufacturer Star Cement has stated that there would be no further stake sale in the company, ruling out any possibility of a complete acquisition by UltraTech Cement.
In December 2024, India's largest cement manufacturer UltraTech Cement had announced the acquisition of a minority 8.69 per cent stake in Meghalaya-based Star Cement from its promoters in a deal worth Rs 851 crore. The move sparked speculations of complete acquisition, following UltraTech's acquisition of India Cements. The Aditya Birla Group company initially had acquired a minority stake in India Cements, followed by a controlling stake acquisition.
"The promoters will stay committed to the company and there are no plans for further dilution," said Chief Financial Officer Manoj Agarwal in a post earnings call with analysts on February 6.
Star Cement has the highest market share in the north eastern region and 79 per cent of its sales comes from the region.
The company's total installed capacity stands at about 8 million tonnes per annum (MTPA) with a 1.67-MTPA integrated cement plant in Meghalaya and four grinding units. The company aims to expand this capacity to 25 MTPA by 2030. UltraTech's stake purchase comes as most major cement players are setting sights on the North East as a potential market for expansion.
"India Cements case was different, it was making losses and promoters wanted to exit. Star Cement's main promoters, are not willing to sell their stake in the company. UltraTech can only proceed if all the promoters agree and it doesn't look like it, as per the current status," said Uttam Kumar Srimal, analyst at Axis Securities.
In 2024, UltraTech acquired a 55.49 percent stake in Chennai-based India Cements. It picked up a 22.7 percent stake in India Cements in June. On July 28, UltraTech Cement announced it would purchase another 32.72 percent stake for Rs 3,954 crore at Rs 390 a share. Earlier this month, the company launched an open offer to acquire an additional 26 percent stake from public shareholders.
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