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

“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,” said Ajay Kapur, CEO and Whole Time Director of Ambuja Cements.

Adani Group is the second largest cement manufacturer in India behind the Aditya Birla Group. Adani Group has set a target to corner 20 per cent marketshare in the country’s cement sector by 2027-28, up from the current 14 per cent. Ambuja, with its subsidiaries ACC and Sanghi Industries Ltd, has taken the Adani Group’s cement capacity to 78.9 MTPA, with 18 integrated cement manufacturing plants and 19 cement grinding units across the country. The acquisition will improve Adani Cement’s market share pan India by nearly 2 per cent and around 8 per cent in south India, according to the company. PCIL has 14 MTPA cement capacity, of which 10 MTPA is operational, and the remaining is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and will be completed within 6 to 12 months.

Around 90 per cent of the cement capacity comes with railway sidings, and some are supported by captive power plants and waste heat recovery systems. Further, surplus clinker at the Jodhpur plant will support an additional 3 MTPA cement grinding capacity over and above 14 MTPA.

The acquisition will strengthen Adani Cement’s sea transportation logistics with five bulk cement terminals at Kolkata, Gopalpur, Karaikal, Kochi and Colombo to serve peninsular India. “The bulk cement terminals 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,” Kapur said. The existing dealers of PCIL will move to Adani Cement’s market network.

In the fiscal ended March 31, 2024, Ambuja Cements’ standalone profit after tax stood at Rs 2,335 crore as compared to Rs 2,058 crore. Revenue from operation was Rs 17,919 crore in FY24, as against Rs 16,060 crore in FY23. The shares of Ambuja Cements ended at Rs 664.3 apiece, down 0.63 per cent.