Market speculation is rife over a potential divestment by PT Semen Indonesia (SMGR) of its controlling stake in its subsidiary, PT Semen Baturaja (SMBR), as Indian cement giant UltraTech Cement reportedly eyes an acquisition.

Sources familiar with the matter suggest SMGR, which currently owns 75.51 percent of SMBR, is open to selling its shares should the price be deemed favorable. The potential sale has attracted widespread attention from investors, especially following whispers of UltraTech’s interest in expanding into Indonesia’s cement industry.

UltraTech Cement, part of India’s Aditya Birla Group and valued at around US$8.4 billion, is India’s largest producer of grey cement and ready-mix concrete. Market players speculate that an entry into Indonesia via SMBR could offer the Indian firm a strategic foothold in Southeast Asia.

“SMBR’s valuation is currently very low, with a price-to-book value of only 0.6 times. This makes it an attractive acquisition target,” said one market observer.

“Additionally, with coal prices declining, cement production costs are falling, which could serve as a catalyst for stronger financial performance,” he added.

Despite the buzz, there has been no official confirmation from Semen Indonesia regarding the rumored deal. Meanwhile, the Indonesia Stock Exchange (IDX) is awaiting formal disclosure from the company.

"This is quite interesting, friends. Where did you hear such rumors from?" Director of Company Valuation at the Indonesia Stock Exchange (IDX), Gede Nyoman Yetna, spoke to journalists, on Thursday, May 8, 2025

Nyoman stressed that companies are obliged to inform the public and the stock exchange before executing any corporate actions. “So if there is any news circulating, the most important thing is to wait for an official explanation from the corporate secretary or one of the directors,” he said.

“We are waiting for the company to make an official announcement through an information disclosure,” he added.

General Manager of Corporate Communications at Semen Indonesia Group, Arif Gunawan Sulistiyono, confirmed that any official statement would be issued by the Corporate Secretary.

“For now, we’ve submitted the query internally. Hopefully, an official statement will be issued soon,” Arif spoke to Indonesia Business Post, on Thursday. However, he could not confirm a timeline, citing that senior management was currently out of office.

Meanwhile, SMBR Senior Manager of Secretarial, Pramaja Gusnady, said that there has been no official communication between SMBR, SIG (Semen Indonesia Group), and UltraTech.

“We have not had any official discussions nor contact with UltraTech or SIG regarding this matter,” he told the Post.

Industry analysts note that even if SMGR releases its stake in SMBR, the company’s presence in Sumatra would remain intact through its other subsidiaries, Semen Padang and Semen Andalas.

Furthermore, since SMGR is now under the management of the state investment arm, Daya Anagata Nusantara (Danantara Indonesia), it is no longer a State-owned entity, which means the divestment would not require parliamentary approval.

While SMGR top brass have remained tight-lipped, investors continue to monitor the situation closely. A potential acquisition could be a major positive trigger for SMBR’s stock, which many still consider undervalued.

As speculation swirls, all eyes remain on SMGR’s next move and the formal response from its corporate leadership