Adani Group firm buys Penna Cement for Rs 10,422 crore. Details here

Ambuja Cements Ltd on Thursday announced acquisition of Penna Cement Industries Ltd at an enterprise value of Rs 10,422 crore. Ambuja is the cement and building material company of Adani Cement and a part of the Adani Group.

"Ambuja will acquire 100 per cent shares of PCIL from its existing promoter group, P Pratap Reddy and family. The acquisition will be fully funded through internal accruals," the company stated in an exchange filing.

"PCIL has 14 million tonnes cement capacity, of which 10 million tonnes is operational, and the remaining is under construction at Krishnapatnam (2 million tonnes) and Jodhpur (2 million tonnes) 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 million tonnes cement grinding capacity over and above 14 million tonnes," it mentioned.

"PCIL's strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment. Importantly, the bulk cement terminals (BCTs) will prove to be a gamechanger by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route," said Ajay Kapur, CEO & Whole Time Director at Ambuja.

Adani Cement at present is the second leading company in the sector after UltraTech. Adani has reportedly set aside a kitty of $3 billion for the group's ambitious cement plan.

The Indian cement industry is poised for growth, with demand expected to rise at a compound annual growth rate (CAGR) of 7-8 per cent over the next five years.

The Adani Group's ambitious expansion plans align with this growth trajectory, positioning it to leverage opportunities in the building materials industry.

Ambuja, with its subsidiaries ACC Ltd, has the capacity to produce 78.9 million tonnes of cement annually from 18 integrated cement manufacturing plants and 19 cement grinding units across the country. It had recently acquired Sanghi Industries Ltd.

The announcement came post-market hours today. Shares of Ambuja Cements settled 0.63 per cent lower at Rs 664.30.