Star Cement shares jump 8% on UltraTech stake acquisition announcement

Shares of North East-based Star Cement gained strong momentum in Friday's trade. The stock jumped 7.84 per cent to hit a day high of Rs 247.75. It was last seen trading 3.98 per cent up at Rs 238.90. At this price, the scrip has soared 34.98 per cent in a month.

Today's sharp upmove in the share price came after country's largest cement producer UltraTech Cement Ltd said it would acquire a non-controlling minority stake of 8.69 per cent in Star Cement for Rs 851 crore.

"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 crore equity shares of Star Cement at a price not exceeding Rs 235 per share, excluding STT; stamp duty and other levies," UltraTech added.

As mentioned above, Star Cement has been on a gaining spree lately. Earlier this month, it issued a clarification over a news report titled "Adani Group evaluates acquiring Star Cement for expansion in NE (North East)." The cement firm, in response to an exchange query, termed the report as 'speculative', adding that is not engaged in any discussions in this regard.

The counter saw high trading volume on BSE today as around 2.26 lakh shares changed hands at the time of writing this story. The figure higher than the two-week average volume of 2.14 lakh shares. Turnover on the stock came at Rs 5.45 crore, commanding a market capitalisation (m-cap) of Rs 9,560.89 crore.

The scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 63.70. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the carrier's stock has a price-to-equity (P/E) ratio of 121.56 against a price-to-book (P/B) value of 5.87. Earnings per share (EPS) stood at 1.95 with a return on equity (RoE) of 4.83.

Star Cement is the largest manufacturer with the highest market share in the North East with an installed capacity of 7.7 mtpa (million tonnes per annum). As of September 2024, promoters held a 66.47 per cent stake in the cement firm.