Star Cement board to meet on June 21 to consider proposed buyback

The board of Star Cement is scheduled to meet on June 21 to decide on a proposed buyback, which the company says would increase the liquidity position of its shareholders. A decision on whether the company's promoters can participate in the buyback, if approved, will also be taken.

As on March 31, 2019, the promoters and its group companies held 67.99 per cent of the total shares. Sajjan Bhajanka, the company’s chairman and managing director, in his individual capacity, held 11.29 per cent of the total stakes, while Prem Kumar Bhajanka, a director at Star Cement held a 9.12 per cent stake.

“The board will decide if we will go ahead with the buyback and if at all the promoters will be able to participate in it. If the buyback is approved, by means of an open offer, shareholders may get more money because of that”, Sajjan Bhajanka said.

Asked about the reason behind the proposal, Bhajanka said, “We are a debt free company and have around Rs 400 crore of reserve funds; there is no projection of how to utilise it as of now. Part of it may be used to fund the proposed buyback”.

The company is already putting up its grinding unit in Siliguri (West Bengal), which is expected to be commissioned by early 2020. It will take up the company's total production capacity to over 6 million tonne (mt). Its limestone reserves in Meghalaya will feed the upcoming plant.

WIth a 23 per cent market share in the north-east, Star Cement is also eyeing acquisition of stressed cement plants and companies.