Kumar Mangalam Birla’s another big move, to acquire stake in this company for Rs 8510000000, major challenge for Gautam Adani in…

The development comes a few days after the Aditya Birla group firm completed the acquisition of a controlling stake in India Cements Ltd, turning south-based company into its subsidiary.

Kumar Mangalam Birla led UltraTech Cement has announced its decision to acquire approximately 8.69% stake in Star Cement for a maximum investment of Rs 851 crore. The company’s Board of Directors approved the acquisition during their meeting on December 27, as disclosed in a regulatory filing.

Under the agreement, UltraTech will purchase up to 3.70 crore equity shares of Star Cement at a price of Rs 235 per share, excluding applicable taxes, stamp duty, and additional charges. The move aligns with UltraTech’s strategic expansion to strengthen its market leadership amid increasing competition from rivals, including the Adani Group.

UltraTech Cement Major Move

This decision follows UltraTech’s recent acquisition of a 32.72% stake in India Cements, showcasing the company’s commitment to consolidating its position in the cement industry. UltraTech’s latest investment is expected to further solidify its footprint in the market by leveraging synergies with Star Cement, a leading player in the Northeast region of India.

According to the company, some promoter and promoter group entities of Star Cement “propose to sell their equity holding in Star Cement and have approached the company for the same”.

“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 up to 3.70 crores equity shares of Star Cement at a price not exceeding Rs 235/- per share, excluding STT, stamp duty and other levies,” it said.

Over the cost of acquisition or the price at which shares are acquired, UltraTech said it will “not exceed Rs 851 crore, excluding STT”.

Aditya Birla Group VS Adani Group

The Indian cement industry is witnessing consolidation and heightened rivalry between two corporate houses Kumar Mangalam Birla-led Aditya Birla Group and Gautam Adani-led Adani Group — snapping smaller players.

The Adani group has plans in the works to raise its production capacity to 140 MTPA by FY28, just a shade below market leader UltraTech’s current capacity of 156.66 MTPA of grey cement.

Adani Cement recently announced the acquisition of CK Birla group firm Orient Cement, through which it will achieve a capacity of 100 MT (million Tones) per annum by the end of FY25 and a gain of 2 per cent in the overall market share in the country.

It has completed the acquisition of Saurashtra-based Sanghi Industries, and Penna Industries and recently announced the acquisition of CK Birla group firm Orient Cement as part of its inorganic growth strategy.

Aditya Birla Group also plans to maintain its lead with 200 MTPA capacity by FY27. UltraTech is also in the process of acquiring Kesoram Industries’ cement business and is awaiting regulatory clearance.

(With inputs from PTI)