Star Cement shares zoom 8% as Ultratech to buy 8.6% stake for Rs 851 crore

Star Cement-Ultratech Cement deal: Ultratech has approved to make an investment to acquire non-controlling minority stake for up to 37 million equity shares of Star Cement at a price Rs 235 per share

Star Cement shares rallied 7.8 per cent to Rs 247.75 per share on the BSE on Friday after Ultratech Cement said it has agreed to buy a ‘non-controlling’ stake in Star Cement.

 

At 9:25 AM, Star Cement share price today was Rs 240.15 per share, up 4.5 per cent, as against a 0.38 per cent rise in the benchmark BSE Sensex.

 

A combined 4.8 million shares have already changed hands on the BSE and NSE till the time of writing of this report.

 

Ultratech Cement shares, on the other hand, rose 1.2 per cent intraday to hit a high of Rs 11,594.85 per share.

 

Ultratech-Star Cement deal

According to a stock exchange filing by Ultratech Cements, the Board of Directors of the company, at its meeting held today, considered the proposal and approved making an investment to acquire non-controlling minority stake for up to 37 million equity shares of Star Cement at a price not exceeding Rs 235 per share, excluding STT; stamp duty and other levies.  

 

“The cost of acquisition would be not more than Rs 851 crore for an 8.69 per cent stake,” Ultratech Cement said. The company expects to complete Star Cement acquisition within a month.

 

Meanwhile, Star Cement has seen a consistent improvement in its turnover over the year. In the previous financial year, FY2023-24 (FY24), Star Cement reported a turnover of Rs 2,910.66 crore.

 

This was higher than an annual turnover of Rs 2,704.84 crore in FY23, and Rs 2,221.81 crore in FY22.

 

The latest acquisition comes at a time Ultratech Cements has completed the acquisition of 101.3 million equity shares of India Cements, to purchase an additional 32.72-per cent stake in the company.

 

“This, together with the existing shareholding of 7,05,64,656 equity shares (22.77 per cent) of the equity share capital of India Cement, has resulted in the Company’s shareholding increasing to 17,19,55,887 equity shares, representing 55.49 per cent of India Cement’s equity share capital,” Ultratech Cement said.

 

India Cements is, now, a wholly-owned subsidiary of Ultratech Cement.

 

Meanwhile, with Star Cement’s stake, too, under its ambit, Ultratech Cement has deepened its position as India’s largest cement producer in the country.