CORPORATE
With Rs 10,422-crore Penna deal, Adani Group eyes topmost cement-maker slot
- IBJ Bureau
- Jun 14, 2024
Adani Group company Ambuja Cements Ltd acquiring Penna Cement Industries (PCIL) for Rs 10,422 crore.
The Adani Group’s announcement comes amid reports that it has prepared a war chest of $3 billion to acquire small- and mid-sized cement companies in a bid to dethrone UltraTech Cement, India’s largest cement-maker, owned by the Aditya Birla Group.
UltraTech Cement is also maintaining a flurry of expansion and acquisitions to maintain it top position in the industry.
In a regulatory filing, Ambuja Cements has said that it will acquire 100 per cent shares of Penna Cement from the existing promoter group, P Pratap Reddy and family, with the deal funded by internal accruals.
Penna Cement will add 14 mt of capacity to Adani’s kitty, of which 10 mt is operational. The remaining are under construction in Krishnapatnam in Andhra Pradesh (2 mt) and Jodhpur, Rajasthan (2 mt). Ambuja Cements has said that the deal will be completed within 6 to 12 months.
The acquisition solidifies the Adani Group’s presence in southern India as Penna Cement’s operational capacities are largely across Andhra Pradesh and Telangana.
“This landmark acquisition is a significant step forward in Ambuja Cement’s accelerating growth journey. By acquiring PCIL, Ambuja is poised to expand its market presence in South India and reinforce its position as a pan-India leader in the cement industry. PCIL’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment,’’ Ajay Kapur, the CEO and wholetime director of Ambuja Cements, has said.
Report By
View Reporter News