Cement sector giant UltraTech Cement Ltd has announced to buy 8.69 percent stake in Star Cement Ltd for Rs 851 crore. The deal involves the purchase of 3.7 crore equity shares at a price above Rs 235 per share, excluding taxes and other levies. Star Cement’s promoters and promoter group entities proposed to sell their equity holdings. UltraTech Cements decided to invest in this. The transaction was approved at the UltraTech Cements board meeting on 27 December. The move is being seen as a strategic investment by UltraTech into a non-controlling minority stake in the company.
Besides, transactions involving 3.36 crore shares or 8.3 per cent equity worth Rs 766 crore in Star Cement took place in a block deal window. As a result, shares of Star Cement jumped more than seven per cent to Rs 247.30 in 9.20 am trade.
Approval for acquisition of ICL received on December 20
Earlier this month, on December 20, the Competition Commission of India said it has approved the acquisition of India Cements Limited (ICL) by UltraTech Cement Limited.
Earlier in July this year, UltraTech Cement announced the purchase of 32.72 per cent stake in India Cements from the promoters and their associates in a deal worth Rs 3,954 crore to increase its presence in the highly competitive and fast-growing southern cement market, especially in Tamil Nadu. Was.
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Apart from this, it had also announced an open offer of Rs 3,142.35 crore to acquire 26 per cent stake in ICL from the company’s shareholders.
The Indian cement industry is witnessing consolidation and increased rivalry between the two corporate houses. These houses are breaking the small players. They are pinning their hopes on the year 2025 for improvement in sales, higher margins and increase in demand. With the help of the government, sales are expected to increase by about 8 percent. The government can spend on big infrastructure projects.
UltraTech Cement CLSA’s Preferred Cement Stock
There was a gradual volume recovery in cement during November after a weak October. Foreign brokerage CLSA said it remains positive on demand pickup in 2HFY25 and FY26. Among cement companies he likes UltraTech Cement.
At market close on Friday, December 27, the stock of UltraTech Cement fell 0.47 percent or Rs 54.10 to close at Rs 11406.55. While the stock of Star Cement closed at Rs 232.18, up 0.95 percent or Rs 2.18.
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