Ambuja Cements merger: Positive for Orient Cement, slight negative for ACC shareholders
Ambuja Cements announced the merger of ACC and Orient Cement with itself via an all share-swap transaction, with no cash consideration involved.
- Dec 23, 2025,
- Updated Dec 23, 2025 8:55 AM IST
Brokerages on Tuesday said Ambuja Cements’ proposed amalgamation of ACC and Orient Cement through an all share-swap deal was largely valuation-neutral, with limited near-term upside for ACC shareholders but a modest benefit for Orient Cement investors, while reinforcing the group’s operational integration and long-term profitability outlook.
The Adani group-led Ambuja Cements announced the merger of ACC and Orient Cement with itself via an all share-swap transaction, with no cash consideration involved. Under the approved swap ratios, shareholders holding 100 shares in ACC and Orient Cement were set to receive 328 shares and 33 shares of Ambuja Cements, respectively. Ambuja currently held around 50 per cent stake in ACC and about 73 per cent in Orient Cement, and would issue roughly 30.8 crore and 1.9 crore fresh shares, respectively, to acquire the remaining equity, resulting in an estimated dilution of around 13 per cent for existing Ambuja shareholders, Emkay Global said.
At current market prices, Emkay Global viewed the transaction as broadly neutral, with a slight negative bias for ACC shareholders, while it saw the deal as mildly positive for Orient Cement shareholders, implying around a 9 per cent premium to the prevailing share price. The brokerage added that the merger was in line with its earlier assessment that Ambuja could move to consolidate ACC, though it had expected limited windfall gains given a largely neutral swap ratio.
"We view this restructuring to be largely value neutral for Ambuja Cements as consensus seems to be building meaningful costs savings/ margin expansion for Ambuja Cements over FY26-28E. We maintain BUY with unchanged target price of Rs 690 based on 17 times 1HFY28E consolidated EV/Ebitda," Antique Stock Broking said.
Brokerages noted that commercial operations were already being run on a consolidated basis under the Master Supply Agreement, covering Ambuja, ACC, Orient, Penna and Sanghi. As a result, Emkay Global said it expected the amalgamation to have a largely neutral impact, with a marginal positive bias, on its estimates.
MOFSL said the announcement was a positive development, as it came against the backdrop of steady improvement in Ambuja Cements’ operating performance. The brokerage highlighted that the company had delivered Ebitda per tonne of over Rs 1,000 for the third consecutive quarter, supported by stable realisations and sequential reduction in operating costs. It added that the integration of acquired assets, including Orient Cement, Penna and Sanghi, had progressed well.
MOFSL noted that Ambuja’s net cash position declined to Rs 2,560 crore as of October 2025 from Rs 10,130 crore in March 2025, largely due to aggressive organic and inorganic expansion and investments in efficiency initiatives such as green power, plant modernisation and logistics upgrades. It estimated that the company would move from a net cash position to net debt over FY26–27E amid elevated capex, before turning net cash positive again in FY28E, supported by stronger operating cash flows from expanded capacity.
On valuation, Emkay Global said it continued to value Ambuja Cements at 16x Sep-27E EV/Ebitda, maintained its target price of Rs 650 and retained its ADD rating. MOFSL maintained a constructive stance, valuing the stock at 20x Sep-27E EV/Ebitda to arrive at a target price of Rs 750, and said it did not apply any holding company discount for ACC or Orient Cement.
MOFSL said the deal will lead to an equity dilution of 12 per cent for Ambuja Cements, and the promoter group holding in the company will reduce to 60.94 per cent from 67.65 per cent post the amalgamation.
"Though the deal appears to be neutral for ACC, we believe that it is positive for ACEM shareholders, as ACC trades at a steep discount to ACEM. At CMP, ACEM trades at 15.4x FY27E EV/Ebitda and $128 FY27E EV/ton, while ACC trades at 7.1 times FY27E EV/Ebitda and $71 FY27E EV/ton. This deal also removes the uncertainties about the merger timelines (subject to regulatory approvals) and would help to create a single pure-play cement entity for the Adani group," MOFSL said.
Brokerages on Tuesday said Ambuja Cements’ proposed amalgamation of ACC and Orient Cement through an all share-swap deal was largely valuation-neutral, with limited near-term upside for ACC shareholders but a modest benefit for Orient Cement investors, while reinforcing the group’s operational integration and long-term profitability outlook.
The Adani group-led Ambuja Cements announced the merger of ACC and Orient Cement with itself via an all share-swap transaction, with no cash consideration involved. Under the approved swap ratios, shareholders holding 100 shares in ACC and Orient Cement were set to receive 328 shares and 33 shares of Ambuja Cements, respectively. Ambuja currently held around 50 per cent stake in ACC and about 73 per cent in Orient Cement, and would issue roughly 30.8 crore and 1.9 crore fresh shares, respectively, to acquire the remaining equity, resulting in an estimated dilution of around 13 per cent for existing Ambuja shareholders, Emkay Global said.
At current market prices, Emkay Global viewed the transaction as broadly neutral, with a slight negative bias for ACC shareholders, while it saw the deal as mildly positive for Orient Cement shareholders, implying around a 9 per cent premium to the prevailing share price. The brokerage added that the merger was in line with its earlier assessment that Ambuja could move to consolidate ACC, though it had expected limited windfall gains given a largely neutral swap ratio.
"We view this restructuring to be largely value neutral for Ambuja Cements as consensus seems to be building meaningful costs savings/ margin expansion for Ambuja Cements over FY26-28E. We maintain BUY with unchanged target price of Rs 690 based on 17 times 1HFY28E consolidated EV/Ebitda," Antique Stock Broking said.
Brokerages noted that commercial operations were already being run on a consolidated basis under the Master Supply Agreement, covering Ambuja, ACC, Orient, Penna and Sanghi. As a result, Emkay Global said it expected the amalgamation to have a largely neutral impact, with a marginal positive bias, on its estimates.
MOFSL said the announcement was a positive development, as it came against the backdrop of steady improvement in Ambuja Cements’ operating performance. The brokerage highlighted that the company had delivered Ebitda per tonne of over Rs 1,000 for the third consecutive quarter, supported by stable realisations and sequential reduction in operating costs. It added that the integration of acquired assets, including Orient Cement, Penna and Sanghi, had progressed well.
MOFSL noted that Ambuja’s net cash position declined to Rs 2,560 crore as of October 2025 from Rs 10,130 crore in March 2025, largely due to aggressive organic and inorganic expansion and investments in efficiency initiatives such as green power, plant modernisation and logistics upgrades. It estimated that the company would move from a net cash position to net debt over FY26–27E amid elevated capex, before turning net cash positive again in FY28E, supported by stronger operating cash flows from expanded capacity.
On valuation, Emkay Global said it continued to value Ambuja Cements at 16x Sep-27E EV/Ebitda, maintained its target price of Rs 650 and retained its ADD rating. MOFSL maintained a constructive stance, valuing the stock at 20x Sep-27E EV/Ebitda to arrive at a target price of Rs 750, and said it did not apply any holding company discount for ACC or Orient Cement.
MOFSL said the deal will lead to an equity dilution of 12 per cent for Ambuja Cements, and the promoter group holding in the company will reduce to 60.94 per cent from 67.65 per cent post the amalgamation.
"Though the deal appears to be neutral for ACC, we believe that it is positive for ACEM shareholders, as ACC trades at a steep discount to ACEM. At CMP, ACEM trades at 15.4x FY27E EV/Ebitda and $128 FY27E EV/ton, while ACC trades at 7.1 times FY27E EV/Ebitda and $71 FY27E EV/ton. This deal also removes the uncertainties about the merger timelines (subject to regulatory approvals) and would help to create a single pure-play cement entity for the Adani group," MOFSL said.