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UltraTech Cement’s ₹851 Crore Power Move in Star Cement Shakes Market!
Grasim Industries’ UltraTech Cement – India’s largest cement manufacturer has claimed headlines after acquiring an 8.7% stake in Star Cement for ₹ 851 crore. The acquisition speaks volumes about the strategic direction of UltraTech in monopolizing the market, especially the northeast region of India which is controlled by Star Cement. The acquisition implies the direct purchase of up to ₹3.70 crore equity shares at a price not more than ₹235 per share.
Market Reaction
The news led to a lot of movement on the markets with the shares of Star Cement Plying up to ₹247.30 more than 7% in early trade. It was minutes after the Indian cement sector witnessed a new wave of consolidation due to aggressive expansion plans by many players including UltraTech. It also follows the company’s latest deal to acquire a controlling stake in The India Cements Ltd., which strengthened its position in the market.
Strategic Implications
This acquisition is one of the many that UltraTech Cement is making to achieve its goal of dominating the Indian cement market. The strategy aimed at strategic UltraTech is to strengthen the key producer’s position in the north-east region of India where Star Cement is a major player.
Recent Expansion Activities
This investment follows UltraTech's recent acquisition of a majority stake in The India Cements Ltd. The Aditya Birla Group firm bought 32.72% of India Cements, amounting to 10.13 crore shares, on December 24, 2024. With this, UltraTech’s total shareholding in India Cements has gone up to 55.49% thus making UltraTech the single largest owner of the company and its promoter.
Industry Context
The Indian cement industry is experiencing dramatic concentration, with leading players like UltraTech and the Adani Group’s Ambuja Cements actively obtaining stakes in regional cement firms. These strategic investments are directed towards the opportunities to increase market share and fulfil production expectations as the demand for cement products increases within India’s infrastructure industries.
N Srinivasan Steps Down as CEO of The India Cements Ltd
Veteran industrialist N Srinivasan resigned as CEO and Managing Director of The India Cements Ltd on Wednesday, following the company’s acquisition by UltraTech Cement.
In a resignation letter addressed to the Board, Srinivasan stated, “Consequent to the divestment of my entire shareholding in The India Cements Ltd, I hereby tender my resignation as Vice Chairman & Managing Director, Director, and Chief Executive Officer (KMP) with immediate effect. I also cease to be the Promoter of the company with immediate effect.”
This marks the end of an era for the long-serving leader and a new chapter for India Cements Ltd under UltraTech Cement’s stewardship.
Conclusion
The acquisition of Star Cement by UltraTech Cement is a clear example of the strong pipeline for infrastructure projects in India alongside increased demand for cement auguring well for the group and increased consolidation that is sweeping the cement industry. The deal points to leveraging partners to grow the company’s network to meet the increasing infrastructural demands of the country.