Adani Group’s Ambuja Cements announces acquisition of Sanghi Industries at Rs 5,000 crore

Ambuja Cements, Adani Group’s cement and building material arm, has announced the acquisition of Sanghi Industries (SIL) at an enterprise value of Rs 5,000 crore. Ambuja Cements will acquire 56.74 per cent shares of Sanghi Industries from the latter’s existing promoter group Ravi Sanghi and family. This acquisition will be completely funded through internal accruals, the company said in a release.

Commenting on Ambuja’s acquisition of Sanghi Industries, Adani Group chairman Gautam Adani said the acquisition is aimed at expanding Ambuja’s market presence and bolstering its product portfolio. Adani further mentioned that the Adani Group is well on course to achieve its targeted cement manufacturing capacity of 140 MTPA by 2028 ahead of time.

 “By joining hands with SIL, Ambuja is poised to expand its market presence, strengthen its product portfolio, and reinforce its position as a leader in the construction materials sector. With this acquisition, the Adani Group is well on course to achieve its target of 140 MTPA of cement manufacturing capacity by 2028 ahead of time,” Adani said.

He added that Ambuja Cements will increase its capacity at its plant in Sanghipuram in Gujarat’s Kachchh district to 15 MTPA with Sanghi Industries’ limestone reserves of a billion tonnes. Adani further said that Ambuja Cements will also invest in expanding the captive port at Sanghipuram for handling larger vessels.

The Adani Group chairman said the company’s aim is to make Sanghi Industries the lowest cost producer of clinker, used for cement production, in the country. SIL’s integrated manufacturing unit at Sanghipuram is India’s largest single-location cement and clinker unit by capacity. This unit is also connected with a captive jetty in Sanghipuram.

The unit is spread across 2,7000 hectares of land and has two kilns with a clinker production capacity of 6.6 MTPA and a cement grinding unit with a capacity of 6.1 MTPA. SIL’s Sanghipuram unit has a captive power of 130 MW and waste heat recovery system of 13 MW. Apart from this, Sanghi Industries has a network of 850 dealers, with market presence in Gujarat, Madhya Pradesh, Rajasthan, Maharashtra and Kerala.  

Through this acquisition, Adani Group’s cement and building material arm aims to increase its cement capacity from the existing 67.5 MTPA to 73.6 MTPA. The Adani Group’s capacity will hit 101 MTPA by 2025 as it is planning to commission 5.5 MTPA capacity at Dahej and Ametha by Q2FY24 and has an ongoing capex of 14 MTPA.

Sanghi Industries also has a bulk cement terminal at Gujarat’s Navlakhi Port and Maharashtra’s Dharamtar Port. Ambuja-ACC, JK Laksmi Cement and UltraTech are the top 3 cement players in Gujarat. Sanghi Cement too derives a bulk of its revenues from the state.

Following the announcement, shares of Ambuja Cements rose about a per cent to Rs Rs 466.6 on Thursday. 

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