Ambuja Cements, the cement and building material company of Adani Cement and is a part of the diversified Adani Group. File.
| Photo Credit: Reuters

Billionaire Gautam Adani-led Ambuja Cements has sought approval from the Competition Commission of India (CCI) to acquire a majority stake in CK Birla group firm Orient Cement Ltd in a ₹8,100-crore deal.

According to a CCI notice, the proposed transaction is a two-stage acquisition process, initiated through two share purchase agreements (SPAs) on October 22, 2024, will see Ambuja Cements initially acquiring a 46.80% stake in Orient Cement.

This includes a 37.90% stake from the current promoter group and an additional 8.90% from certain public shareholders.

Pursuant to the acquisition of shares, it “triggers an obligation on the acquirer to make an open offer under Sebi’s SAST (Substantial Acquisition of Shares and Takeovers) rules for acquisition of up to 26 per cent of the expanded share capital of the target (open offer)”, according to the notice.

Assuming full acceptance of open offer, the stake of Ambuja Cements will stand at 72.8%, said a notice filed with the CCI on Friday.

In October, billionaire Gautam Adani-led Adani Group said it has signed a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of ₹8,100 crore. The acquisition will add 16.6 MTPA (million tonne per annum) capacity to Adani Cement, which operates through Ambuja Cements in the sector.

Ambuja Cements, the cement and building material company of Adani Cement and is a part of the diversified Adani Group. It operates 22 integrated cement plants across India, as well as 10 bulk cement terminals and 21 grinding units.

Orient Cement has three manufacturing facilities in Telangana, Karnataka and Maharashtra, with distribution in 10 states across India.

Further, Ambuja Cements said that the proposed acquisition of Orient Cement by Ambuja Cements does not pose any competition concerns, allowing the CCI the flexibility to keep market definitions open.

For its assessment, however, CCI has outlined two relevant markets such as a broad market covering grey cement manufacture and sale in Telangana, Maharashtra, Karnataka, Madhya Pradesh, and Gujarat, and a narrower market focused on Telangana, Maharashtra, and Karnataka.

The parties (Ambuja and Orient Cement) have also identified certain insignificant existing and potential vertical linkages and supply arrangements pertaining to products/ services such as limestone, fly ash, clinker, coal management services, ready mix concrete and provision of construction activities, which is linked to the market for manufacture of cement.

These vertical linkages do not give rise to any competition concerns whatsoever, they added.

In June this year, Adani had announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of ₹10,422 crore, which added 14 MTPA capacity to the country’s second largest manufacturer.

Ambuja Cements Limited is part of Adani Group. File
| Photo Credit: The Hindu

Ambuja Cements Limited, part of Adani Group, for the second quarter, reported consolidated net profit of ₹456 crore as compared with ₹793 crore in the year ago period, down by 42%. 

The company’s revenue from operations for the quarter ending September 30, 2024 grew marginally to ₹7,516 crore as compared with ₹7,424 crore in the same period last year.

Ambuja Cements to acquire Penna Cement for ₹10,422 crore

“This performance is supported by healthy volume growth, increasing scale of operations, value extraction of acquired assets, enhanced cost leadership, improved operational efficiencies and group synergies,” the company said in a statement.

Ajay Kapur, Whole Time Director & CEO, Ambuja Cements, said, “We are glad to deliver another sustained performance aligned to our growth blueprint and setting new benchmarks in efficiency. We continue to focus on innovation, digitisation, customer satisfaction and ESG as the core elements of our business. With our strong foothold across the nation, we are further expanding our footprint in new geographies in-line with our vision.”

“Post successful completion of the Orient Cement transaction, we are well poised to achieve over 100 MTPA capacity by this fiscal year end,” he added.

New Delhi:

Billionaire Gautam Adani’s family infused an additional Rs 8,339 crore into Ambuja Cements, raising its stake in the company to 70.3%, to help the cement maker’s manufacturing capacity.

The Adani family had previously invested Rs 5,000 crore in the company on October 18, 2022, and Rs 6,661 crore on March 28, 2024. With the latest investment, it has completed the planned Rs 20,000 crore infusion, the company said in a statement.

“The promoters of the company – Adani family – has fully subscribed to the warrants program in the company by further infusing Rs 8,339 crore, thereby infusing a total amount of Rs 20,000 crore,” it said.

The latest infusion raises the Adani family stake in Ambuja Cement by 3.6% to 70.3%.

In all, its holding in Ambuja Cement has increased from 63.2% to 70.3%.

The fund infusion will help Ambuja accelerate its growth ambitions to almost double its existing capacity to 140 million tonnes per annum by 2028 from 76.1 million tonnes as of December 31.

“With this, promoters have further strengthened Ambuja post-acquisition, giving Ambuja capital flexibility for accelerated growth, capital management initiatives and best-in-class balance sheet strength to accomplish its various strategic initiatives,” the statement said.

In 2022, the Adani group entered the cement sector with a $10.5 billion deal to buy Ambuja and ACC from Swiss giant Holcim.

“This strategic move underscores unwavering commitment to have a robust capital management philosophy for the portfolio companies, and the latest investment testifies the commitment by the Adani family to boost future prospects and potential of cement vertical.

“The additional investment will fortify the company’s financial position, providing it with enhanced capabilities to pursue its ambitious growth plans and capitalise on emerging opportunities in the market,” the statement said.

Besides boosting capacity expansion, the funds infusion would also enable various strategic initiatives, including debottlenecking capex, to enhance operational performance, as well as bringing efficiencies across resources and supply chain, Ambuja Cement said, adding that it shall also drive innovation and product enhancement through advanced technology integration for better service offerings to tap the growing requirements of the sector driven by the growth in the Indian economy.

“We are thrilled to announce the completion of the Adani family’s primary infusion of Rs 20,000 crore in Ambuja,” said Ajay Kapur, CEO of Ambuja Cements Ltd.

“This infusion of funds provides Ambuja, capital flexibility for fast-tracked growth, capital management initiatives and best-in-class balance sheet strength. It is not only a testament to a steadfast belief in our vision and business model but also reinforces our commitment to delivering long-term sustainable value creation to our stakeholders, and this shall propel us towards setting new benchmarks, accelerating our growth, and continuing to deliver on operational excellence, business synergies and cost leadership.”

Barclays Bank PLC, MUFG Bank, Mizuho Bank and Standard Chartered Bank acted as advisors for the transaction.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)

File.
| Photo Credit: Reuters

Ambuja Cements on April 15 said it will acquire My Home Group’s cement grinding unit at Tuticorin in Tamil Nadu for a total value of ₹413.75 crore.

The company — a part of the Adani Group — has signed a definitive agreement to acquire the cement grinding unit of the My Home Group, which has a capacity of 1.5 MTPA, Ambuja Cements said in a statement.

“The acquisition estimated at a total value of ₹413.75 crore through internal accruals will aid in enhancing the coastal footprint across southern markets of Tamil Nadu and Kerala,” it added.

The total cement capacity of Adani Group stands at 78.9 MTPA, the company said.

“In addition to the infrastructure and geographical advantages, Ambuja Cements will also inherit the existing dealer network and retain current employees, facilitating a smooth transition and enabling the rapid ramp-up of utilisation,” Ajay Kapur, CEO, Cement Business, Adani Group, said.

The grinding unit is spread across 61 acres near the Tuticorin Port with a long-term fly ash agreement. It will be value accretive from the beginning, the statement said, adding that Ambuja Cements will leverage the coastal footprint.

This acquisition provides access to southern market customers.

Furthermore, the limited availability of limestone in Tamil Nadu presents a unique competitive advantage with coastal movement of clinker from the Sanghipuram Plant ensuring cost-efficient operations, as per the statement.

New Delhi:

Ambuja Cements Ltd on Wednesday reported a multifold increase in consolidated net profit at Rs 987.24 crore for the quarter ended on September 30, on reduction in operating cost.

The company, now part of the Adani Group, had clocked a net profit of Rs 51.30 crore in the July-September quarter a year-ago, according to a regulatory filing by Ambuja Cements.

Its consolidated revenue from operations was up 4.10 per cent to Rs 7,423.95 crore during the quarter under review. It was Rs 7,131.39 crore in the corresponding period of the last fiscal year.

“This could be achieved with high focus on cost leadership, business synergies and operational excellence,” said an earning statement from Ambuja Cements.

The consolidated results of Ambuja Cements include the financial performance of its step-down firm ACC Ltd, in which it owns around 51 per cent stake.

Ambuja Cements’ total expenses were down 8.52 per cent at Rs 6,564.28 crore, from Rs 7,175.81 crore a year ago.

Its total consolidated revenue in the September quarter was up 9.1 per cent to Rs 7,900 crore.

On a standalone basis, Ambuja Cements reported a four-fold jump in net profit to Rs 643.84 crore in the July-September quarter, as against Rs 138.91 crore in the year-ago quarter.

Its standalone revenue from operations increased 8 per cent to Rs 3,969.79 crore, as against Rs 3,675.61 crore earlier.

Shares of Ambuja Cements Ltd on Wednesday were trading at Rs 410.55 on BSE, down 3.29 per cent from previous close.