Aditya Birla group’s UltraTech Cement has been on a buying spree of late. Just three days after it closed the majority stake takeover of Chennai-based India Cements, the company announced it acquired an 8.69 per cent minority stake in Meghalaya-based Star Cement.
The consideration for the stake acquisition would not exceed Rs 851 crore in cash, the company said in a regulatory statement.
UltraTech’s foray into the northeast cement market involves the deal for a minority stake of up to 3.7 crore shares valued at Rs 235 apiece, excluding taxes, stamp duty, and other charges. This alone comes to a whopping Rs 869.5 crore.
For fiscal 2024, Star Cement posted a turnover of Rs 2,910.66 crore, 7.6 per cent higher than its revenue a year ago. The acquisition of the East Jaintia Hills-based cement maker is expected to be completed in a month.
India is the second largest cement manufacturer in the world, with an installed cement capacity of about 690MTPA, according to the Cement Manufacturers Association. Out of this, UltraTech leads the pack with an installed capacity of around 157MTPA of grey cement. The only true challenger to UltraTech in the industry is Adani group's combo of Ambuja Cement and ACC.
Post the acquisition of shares, UltraTech Cement will have a non-controlling minority stake in the company. It was almost exactly how UltraTech Cement held on to a minority stake in India Cements (ICEM) not long ago before acquiring more of it making it the controlling shareholder since December 24.
India Cements also has connections to cricket in more ways than one. Following the ICEM deal, former ICC chairman N. Srinivasan resigned as CEO and MD of India Cements on December 25.
India Cements Shareholders Trust, as of the latest available information, also owns 30 per cent of Chennai Super Kings Cricket Ltd, the company that owns the IPL franchise of the same name.
