Cement manufacturer UltraTech Cement Limited on Friday announced that it plans to acquire an 8.69% stake in Star Cement Limited. The acquisition involves purchasing up to 37 million equity shares at a price not exceeding ₹235 per share in an all-cash deal amounting to a total of ₹851 crore.

"The board of directors of the company at its meeting held today considered the proposal and approved making an investment to acquire a non-controlling minority stake of up to 3.70 crore equity shares of Star Cement at a price not exceeding ₹235 per share, excluding STT, stamp duty, and other levies," UltraTech Cement said in a regulatory filing with the Bombay Stock Exchange on Friday.

UltraTech, part of the Aditya Birla Group, disclosed in its filing with the Bombay Stock Exchange (BSE) that this is a strategic financial investment in Star Cement, a company known for its strong presence in the northeastern region of India. Star Cement reported a turnover of ₹2,910.66 crore for the financial year ending March 31, 2024.

The move helps UltraTech expand its market presence across India, especially in northeast India. The company had announced last week that it had completed its acquisition of India Cements Limited (ICL). UltraTech initially acquired a 22.77% stake in ICL in June 2024 and later raised its shareholding to 55.49%, making ICL a subsidiary. The Competition Commission of India (CCI) approved the ₹3,954 crore transaction this week, the company said in a regulatory filing.

UltraTech stated that the Star Cement transaction is expected to close within a month, subject to standard regulatory approvals and conditions. UltraTech aims to achieve a production capacity of 183.5 million metric tonnes by the fiscal year 2027 with its recent acquisitions.

The Indian cement industry has witnessed heightened competition and consolidation in recent years, especially with the entry of new players. UltraTech's recent acquisitions, including the Star Cement investment, reflect its efforts to strengthen its production capacity and market share amid these dynamics. Billionaire Gautam Adani's conglomerate, a recent entrant into the growing cement industry, is giving fierce competition to Aditya Birla-owned UltraTech.

The Adani Group entered the Indian cement industry by acquiring Ambuja Cements in 2022 and ACC from Swiss company Holcim for $10.5 billion, in the largest deal so far in the cement sector. The cement manufacturing majors in the country have been acquiring smaller players to strengthen their positions in the segment, which is expected to see robust growth leveraging the increasing spending on infrastructure projects by the government.

Now Adani Group-owned Ambuja Cements has announced multiple acquisitions, including those of Orient Cements, Penna Cement Industries, and Sanghi Industries, propelling it into a major player in the sector. Meanwhile, UltraTech has made strategic investments to bolster its position in South India by acquiring Kesoram Industries and ICL in the last two years. Dalmia Bharat and Sagar Cements have also announced acquisitions in this period as part of the deal-making in the sector.