Stock Report

Adani Group acquires Penna Cement at enterprise value of Rs. 10,422 crore

Posted On : 2024-06-13 19:47:11( TIMEZONE : IST )

Adani Group acquires Penna Cement at enterprise value of Rs. 10,422 crore

Ambuja Cement, the cement and building material company of Adani Cement and part of the diversified Adani Group, today announced the signing of a binding agreement for the acquisition of Penna Cement Industries Ltd (PCIL) at an enterprise value of Rs. 10,422 crore. Ambuja will acquire 100% shares of PCIL from its existing promoter group, Mr. P. Pratap Reddy and family. The acquisition will be fully funded through internal accruals.

"This landmark acquisition is a significant step forward in Ambuja Cement's accelerating growth journey," said Mr. Ajay Kapur, CEO & Whole Time Director of Ambuja Cement. "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. 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. Our aim is to make PCIL highly competitive on cost and productivity and improve its operating performance."

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% 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 existing dealers of PCIL will move to Adani Cement's market network to bring in formidable synergy.

Shares of Ambuja Cements Limited was last trading in BSE at Rs. 664.30 as compared to the previous close of Rs. 668.50. The total number of shares traded during the day was 296656 in over 9329 trades.

The stock hit an intraday high of Rs. 680.20 and intraday low of 654.75. The net turnover during the day was Rs. 197830915.00.

Source : Equity Bulls


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