look news india
Adani Group firm Ambuja Cements has announced the acquisition of Hyderabad State Penna Cement for Rs. 10,422 crore. The company said in a stock exchange filing today that it has signed a binding agreement to acquire Penna Cement Industries Ltd.
Ambuja Cement will acquire 100% stake in the company from the family of Penna Cement's promoter P Pratap Reddy. The company will raise the entire funding for this acquisition from internal accruals. This acquisition will strengthen Ambuja's presence in South India and will also help it emerge as a leading player in the pan-India cement manufacturing sector. Currently, Penna Cement has a capacity of 14 million tonnes per annum (MTPA), out of which 10 MTPA capacity is operational while the remaining capacity is likely to be commissioned in the next 6 months to 12 months.
According to sources, apart from Penna Cement, Ambuja Cement is trying to dominate the cement industry by acquiring other mid-sized cement manufacturing companies such as Gujarat-based Saurashtra Cement, cement business of Jaiprakash Associates and ABG Shipyard-owned Vadaraj Cement. The market capitalisation of Saurashtra Cement is currently Rs. 1,487 crore. Meanwhile, Dalmia Bharat had signed an agreement to acquire the cement, clinker and power businesses of Jaiprakash Associates for Rs. 5,666 crore in April 2022, but the deal failed due to a dispute among shareholders. Currently, both Jaiprakash Associates and Vadaraj Cement are undergoing the process of bankruptcy proceedings. It is possible that Adani may use Ambuja Cement to acquire other cement manufacturing companies as the company will have Rs. 24,338 crore cash surplus available by April, 2024. With the central government moving ahead with plans to strengthen infrastructure in the country and record capital expenditure for this, it is natural that the demand for cement will increase significantly in the coming times. Therefore, Adani Juth wants to become a leading player in the cement industry.
