EYEING THE NORTHEAST

The key question now is when will UltraTech’s 8.69% stake in Star Cement evolve into a larger play in the Northeast market

- BY KRISHNA GOPALAN

THE INDIAN CEMENT industry has been abuzz with mergers and acquisitions (M&As). Ever since the Gautam Adani-led Adani Group acquired cement companies ACC and Ambuja Cements from Swiss cement major Holcim in 2022 for $10.5 billion, there has been a string of acquisitions. Adani acquired cement companies like Sanghi, Penna and Orient, while Aditya Birla Group-owned UltraTech bought over Kesoram Industries' cement business and India Cements.

The M&A story in the cement sector has primarily revolved around South and West India. Now, UltraTech Cement has made a significant move in Northeast India by picking up an 8.69% noncontrolling minority stake in listed company Star Cement for an outgo of ₹851 crore or at ₹235 per share.

The target company is the largest in the region with a 26% share in terms of sales volume and has an installed capacity of 7.7 million tonnes per annum (mtpa).

The deal follows news reports last month that Ambuja Cements was eyeing Star Cement-claims later denied by the target company.

The interest in the Northeast is not surprising given the region's increasing infrastructure outlay in recent years. A report by Antique Stock Broking shows that investment in the Northeast amounted to ₹5 lakh crore between 2014 and 2024, and is projected to rise to ₹11 lakh crore for the period starting in 2024, over the next five to six years.