620 per cent returns: This small-cap cement manufacturing company is acquired by Ambuja Cements at an enterprise value of Rs 5,000 crore!
The stock gave multibagger returns of 162 per cent in just 1 year, 357 per cent in 3 years and over 620 per cent in 1 decade.
On Thursday, one of the Top Gainers on BSE, shares of Sanghi Industries Ltd jumped 5 per cent upper circuit to Rs 105.76 per share from its previous closing of Rs 100.73. The stock also made a fresh new 52-week high of Rs 105.76 per share with a spurt in volume by more than 2.88 times on BSE.
The sudden rise in the stock price was due to the company announcing that Ambuja Cements Ltd (ACL), the cement and building material company of Adani Cement and part of the diversified Adani Group has acquired Sanghi Industries Ltd (SIL) at an enterprise value of Rs 5,000 crore. ACL will acquire 56.74 per cent shares of SIL from its existing promoter group, Mr Ravi Sanghi & family. The acquisition will be fully funded through internal accruals.
“This landmark acquisition is a significant step forward in Ambuja Cements’ accelerating growth journey,” said Mr Gautam Adani, Chairman of the Adani Group. “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. With SIL’s limestone reserves of a billion tonnes, ACL will increase the cement capacity at Sanghipuram to 15 MTPA in the next two years. ACL will also invest in expanding the captive port at Sanghipuram to handle larger vessels. Our aim is to make SIL the lowest cost producer of Clinker in the country.”
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SIL’s integrated manufacturing unit at Sanghipuram in Gujarat’s Kutch district is India’s largest single-location cement and clinker unit by capacity. With 2,700 hectares of land, the integrated unit has two kilns with a clinker production capacity of 6.6 MTPA and a cement grinding unit with a capacity of 6.1 MTPA. It has a captive power plant of 130 MW and a Waste Heat Recovery System of 13 MW. The unit is also connected to a captive jetty at Sanghipuram.
The acquisition of SIL will help ACL to strengthen its market leadership and increase its cement capacity to 73.6 MTPA from the current 67.5 MTPA. With the ongoing capex of 14 MTPA and with commissioning of 5.5 MTPA capacity at Dahej and Ametha by Q2 of FY24, the Adani Group’s capacity will be 101 MTPA by 2025.
The company had a market cap of Rs 2,732.06 crore. The stock gave multibagger returns of 162 per cent in just 1 year, 357 per cent in 3 years and over 620 per cent in 1 decade. Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.