UltraTech Cement to purchase 9% stake in Star Cement. Details here

UltraTech Cement Ltd on Friday announced it would acquire a non-controlling minority stake of 8.69 per cent in Star Cement Ltd at a value of Rs 851 crore.

"Some promoter and promoter group entities of Star Cement Limited, a company incorporated under the Companies Act, 1956, having its registered office at Village Lumshnong, Dist.: East Jaintia Hills, Khaliehriat, Meghalaya – 793210 (Star Cement), propose to sell their equity holding in Star Cement and have approached the company for the same," UltraTech stated in a BSE filing.

"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," it added.

The Mumbai-based cement company completed the acquisition of 32.72 per cent stake in India Cements. This, when put together with the existing shareholding of 7,05,64,656 equity shares (22.77 per cent) of the equity share capital of India Cements, has resulted in UltraTech's shareholding increasing to 17,19,55,887 equity shares, representing 55.49 per cent of India Cements' equity share capital.

Shares of UltraTech traded higher in opening deals today after the acquisition announcement. The stock was last seen up 0.64 per cent at Rs 11,531.05. At this price, it has climbed 10.23 per cent on a year-to-date (basis).

Around 601 shares changed hands today on BSE at the time of writing this story. The figure was lower than the two-week average volume of 8,115 shares. Turnover on the counter came at Rs 69.08 lakh, commanding a market capitalisation (m-cap) of Rs 3,33,020.43 crore.

Technically, the scrip traded higher than the 5-day, 30-, 50-, 150-day and 200-day simple moving averages (SMAs) but lower than the 10-day and 20-day SMAs. The stock's 14-day relative strength index (RSI) came at 50.23. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the stock has a price-to-equity (P/E) ratio of 51.25 against a price-to-book (P/B) value of 5.49. Earnings per share (EPS) stood at 223.54 with a return on equity (RoE) of 10.72.

As of September 2024, promoters held a 59.99 per cent in the company. UltraTech is the largest producer of cement in the country.