Penna Cement Industries Ltd. was acquired by Ambuja Cements Ltd. on Thursday for an enterprise value of Rs. 10,422 crore. Adani Cement's subsidiary Ambuja is a division of the Adani Group and a manufacturer of building supplies.
"Prathap Reddy and his family, PCIL's current promoter group, will sell all of its shares to Ambuja. The business said in an exchange statement that "internal accruals will be used to fully fund the acquisition."
Of PCIL's 14 million tonnes of cement capacity, 10 million tonnes are now in use, while the remaining 2 million tonnes are being built at Krishnapatnam and Jodhpur and will be finished in six to twelve months. Railway sidings support around 90% of the cement capacity, with waste heat recovery systems and captive power plants providing further assistance. Additionally, it stated that the Jodhpur plant's excess clinker will enable an extra 3 million tonnes of cement grinding capacity on top of the 14 million tonnes already in place.
"Debottlenecking and further investment present a chance to enhance cement capacity at PCIL, given its advantageous location and ample reserves of limestone. Significantly, the bulk cement terminals (BCTs) would alter the game by providing sea access to the eastern and southern regions of the Indian peninsula in addition to an entrance into Sri Lanka,” said Ambuja CEO and Whole-Time Director Ajay Kapur.
After UltraTech, Adani Cement now has the second-most prominent position in the industry. Adani is said to have put aside $3 billion for the group's big cement project. With demand predicted to increase at a compound annual growth rate (CAGR) of 7-8% over the next five years, the Indian cement market is likely to develop.
With its aggressive development plans in line with this growth trajectory, the Adani Group is well-positioned to take advantage of possibilities in the construction materials sector. Ambuja has the ability to generate 78.9 million tonnes of cement yearly from 18 integrated cement production facilities and 19 cement grinding units around the nation through its subsidiaries, ACC Ltd. Recently, Sanghi Industries Ltd. was acquired by it. The news was released today after market hours. Ambuja Cements' stock ended the day 0.63 percent down at Rs 664.30.
