Adani Owned Ambuja Cements to Buy Penna Cement for Rs10,422 Crore
Moneylife Digital Team 14 June 2024
Ambuja Cements Ltd from the Gautam Adani-led Adani group will acquire Hyderabad-based Penna Cement Industries Ltd (PCIL) for an enterprise value of Rs10,422 crore. The deal will add 14MTPA (million tonnes per annum) capacity to the country's second largest cement manufacturer.
 
Ambuja Cements would acquire the 100% from Hyderabad-based PCIL promoter group P Pratap Reddy and family.
 
The acquisition, to be funded by internal accruals, will improve Adani Cement’s market share pan-India by 2% and by 8% in south India, the company says in a regulator filing.
 
The deal will increase Adani's market share in cement in southern India and give an entry into Sri Lanka, where Penna Cement operates a unit through a local subsidiary.
 
Besides, this deal will also provide sufficient limestone reserves to the growth-hungry Ambuja Cement. 
 
PCIL has 14MTPA cement capacity, of which 10MTPA is operational, and the remaining is under construction at Krishnapatnam (2MTPA) and Jodhpur (2MTPA) and expected be completed within next six to 12 months.
 
Ajay Kapur, cheif executive officer (CEO) and whole time director of Ambuja Cement says, "The bulk cement terminals (BCTs) will prove to be a game-changer by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route."
 
In FY23-24, the Adani group successfully completed three acquisitions, including Sanghi Industries, Asian Cements and My Home Group’s cement griniding unit (GU) in Tuticorin, as cement capacity increased by 11.4MTPA, taking the total capacity to 78.9MTPA.
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