Adani Group company acquires 100 per cent stake in This Cement Company for Rs 10,422 Crore: Keep an Eye on This Stock for Tomorrow

The acquisition will increase Adani Cement's market share by approximately 2 per cent nationwide and by around 8 per cent in southern India.

Ambuja Cement, a prominent player in the cement and building material sector and part of the diversified Adani Group has announced the signing of a binding agreement to acquire Penna Cement Industries Ltd (PCIL) for an enterprise value of Rs 10,422 crore.

Under this agreement, Ambuja will purchase 100 per cent shares of PCIL from its existing promoter group, Mr. P. Pratap Reddy and family. The acquisition will be financed entirely through internal accruals.

Mr. Ajay Kapur, CEO & Whole Time Director of Ambuja Cement, expressed enthusiasm about this significant milestone, stating that the acquisition marks a pivotal step forward in Ambuja Cement's growth trajectory. By integrating PCIL into its operations, Ambuja aims to strengthen its market presence in south India and solidify its position as a leading player in the pan-India cement industry. Additionally, PCIL's strategic location and substantial limestone reserves present opportunities for capacity expansion through debottlenecking and additional investments.

PCIL currently boasts a cement capacity of 14 MTPA, of which 10 MTPA is operational. The remaining capacity is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and is expected to be completed within the next 6 to 12 months. Approximately 90 per cent of PCIL's cement capacity is equipped with railway sidings, with some supported by captive power plants and waste heat recovery systems. Moreover, surplus clinker at the Jodhpur plant will facilitate an additional 3 MTPA cement grinding capacity on top of the existing 14 MTPA.

The acquisition will also see the integration of PCIL's existing dealers into Adani Cement's market network, enhancing synergies and further strengthening the combined entity's market position.

Today shares of Ambuja Cement closed at Rs 664.30 per share. The current market capitalization of this Large-Cap cement company stands at Rs 1,63,625 crore.

According to the Quarterly Results, in Q4 FY24, the company reported a revenue of Rs 8894 crore and an operating profit of Rs 1699 crore. The operating profit margin for the quarter stands at 19 per cent. The company’s net profit stood at Rs 1526 crore.

This stock is likely to be in focus tomorrow; investors must keep this on their radar.

Disclaimer: The article is for informational purposes only and not investment advice.