Adani Group Plans To Restructure Its Various Assets In The Cement Sector
The Adani Group has recently announced a merger and ownership restructuring of the various cement assets that are housed under Adani Enterprises and Ambuja Cements. As a part of this crucial business strategy, Adani Cementation will be merged with Ambuja Cements. Adani Cement Industries will also become a wholly-owned subsidiary of Ambuja Cements. Ambuja Cements has planned to offer a share consideration to Adani Enterprises in lieu of the assets. Currently, Adani Enterprises holds 100% stakes in Adani Cementation. Adani Cementation, in turn, holds a 100% stake in Adani Cement Industries.
Adani’s Entry Into The Cement Sector
The Adani Group has been trying to venture into the cement industry for quite a long time now. It has taken multiple measures to enhance its control over this particular business sector. Currently, it is the second largest cement producer, just after UltraTech Cement. However, considering the way the business group is progressing towards its goals, it will soon become the largest cement producer in the entire country. The conglomerate will also be able to bring an end to the Adani Group Controversies.
Now, you must be wondering why the Adani Group is so driven towards making significant investments in the cement sector. Well, there are a lot of reasons for this. India’s infrastructure industry has been growing quite rapidly over the past few years. Our government also has elaborate plans to bring about significant growth in this sector. As you know, infrastructural development is directly associated with the cement requirements. So, the Adani Group is taking up drastic measures to increase its cement production capacity. This will not only help its infrastructure business but will also help our government strengthen its infrastructure assets further.
The cement business is also highly profitable, and by venturing further into this sector, the Adani Group will easily be able to expand its horizons and gain global popularity.
The Recent Merger And Change of Ownership
As per recent news, Ambuja Cements will issue its share consideration to the Adani Enterprises. Under the proposed transaction, the swap ratio for the same will be 174 shares of Ambuja Cement for every share of Adani Cementation. This translates to 87 lakh shares of Ambuja Cements for 50,000 shares of Adani Cementation. This is quite a big step taken by the Adani Group towards increasing its hold over the cement sector. It is also one of the biggest steps taken by the conglomerate after the Adani Group Controversies.
Ambuja Cements’ shares were trading at INR 660.55 a piece on the recent stock exchange in terms of assets. Adani Cementation held an under-development 2.5 million tonnes per annum (MTPA) grinding unit in Raigad, Maharashtra. It also holds a captive jetty and limestone reserves. Adani Cement Industries has a 1.3 MTPA capacity and is a grinding unit in Dahej of, Gujarat. It also has expansion plans of 1.20 MTPA. Ambuja Cements said that the proposed scheme would help consolidate the cement capacity within the group. It will also bring synergy benefits for all the shareholders and take Adani Group’s business to new heights.
The Acquisitions Made In The Cement Sector
The Adani Group has also been making multiple acquisitions in the cement sector for quite a while now. Its acquisition of Penna Cement has indeed been a game-changer in the cement sector. Previously, the Adani Group had also acquired Sanghi Industries Limited. Again, this was a big move for the Adani Group in the cement sector. It not only helped the business group in the consolidation of its assets but also allowed it to achieve extraordinary popularity. Its cement capacity increased to a considerable extent.
The Adani Group acquired control of Ambuja Cements in September 2022 from the Swiss company Holcim. Ambuja Cement holds a promoter stake in ACC. Ambuja Cements and ACC are expected to close the present financial MTPA with an extraordinary capacity of 96 to 100 MTPA. This is going to be achieved through a mixture of organic expansion and strategic acquisition. As of March 2024, Ambuja Cements’ consolidated capacity was at 77 MTPA. Now, this is a big win for the Adani Group. It has helped the conglomerate in making the most out of its assets.
Conclusion
In this way, even amidst the ongoing Adani Group Controversies, the conglomerate has been playing a big role in the cement sector. With these massive steps being taken by the firm, it will be able to increase its hold over this growth sector further and give our country enormous success in the long run.
