Ambuja Cement to Acquire 100% Stake in Penna Cement: Adani Group to Finalize Deal Worth ₹10,422 Crore in 3-4 Months

Adani Group’s Ambuja Cements will acquire a 100% stake in Penna Cement Industries Limited (PCIL). Ambuja Cements disclosed this information in its stock exchange filing on June 13 (Thursday). The acquisition of the entire stake in PCIL will cost Ambuja Cements Rs. 10,422 crore. Ambuja Cements mentioned that it will take approximately 3 to 4 months to complete the acquisition of PCIL. Ambuja Cements will purchase the 100% stake from PCIL’s current promoter group, P Prathap Reddy and family. The company also stated that the acquisition will be fully funded through internal resources.

A significant step in Ambuja Cements’ rapid growth journey

Ajay Kapur, the CEO and Whole-Time Director of Ambuja Cements, stated that this historic acquisition is a significant step in Ambuja Cements’ rapid growth journey. By acquiring PCIL, Ambuja Cements aims to increase its market presence in South India. Additionally, the company is poised to strengthen its position as a leader in the cement industry across India. Ambuja Cements noted that PCIL’s existing dealers will be integrated into Adani Cement’s market network, creating substantial synergies.

PCIL Has a Cement Capacity of 14 MTPA, with 10 MTPA Operational

PCIL has a cement capacity of 14 million tonnes per annum (MTPA), of which 10 MTPA is operational. The remaining capacity is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA). The construction of both capacities is expected to be completed within 6 to 12 months. Approximately 90% of the cement capacity is derived from railway sidings and is supported by some captive power plants and waste heat recovery systems. Additionally, the Jodhpur plant’s extra clinker will support an additional 3 MTPA cement grinding capacity beyond the 14 MTPA.

PCIL Was Established on October 24, 1991, in Hyderabad, Telangana

PCIL was established on October 24, 1991, in Hyderabad, Telangana, and is engaged in the cement manufacturing business. The company operates directly and through its subsidiaries in India and Sri Lanka. PCIL’s consolidated turnover was ₹1,241 crore in FY24, ₹2,002 crore in FY23, and ₹3,204 crore in FY22.

Ambuja Cement’s Q4 Net Profit Rises 6% to ₹532 Crore

Ambuja Cement announced its Q4FY24 results on May 1. The company’s standalone net profit for the January-March quarter increased by 5.94% year-on-year to ₹532.29 crore. In the same quarter last year (Q4FY23), the company’s profit was ₹502.40 crore. In the previous third quarter, the company had reported a profit of ₹513.68 crore. Ambuja Cement is the second-largest cement producer in India by market cap.

Ambuja Cement’s Consolidated Net Profit Rises by 64%

In Q4 of FY23, Ambuja Cement’s consolidated net profit increased by 64% year-on-year to ₹1,055 crore. In the same quarter of the previous financial year, the profit was ₹645 crore. During the fourth quarter, the company’s revenue from operations was ₹8,893.99 crore, which is 11.64% higher year-on-year. In Q4FY23, the company’s revenue was ₹7,965.98 crore.

Profit Increases by 56.66% for the Entire Financial Year

For the entire financial year, Ambuja Cement’s consolidated profit increased by 56.66%. In FY24, the company’s consolidated profit was ₹4,738.01 crore, compared to ₹3,024.38 crore in the previous financial year, FY23.

Adani Group Acquired Ambuja Cement and ACC Cement in June 2022

The Adani Group acquired Ambuja Cement and ACC Cement for $10.5 billion in June 2022. Recently, Gautam Adani’s family invested ₹8,339 crore in Ambuja Cement, increasing their stake in the cement producer to 70.3%. Ambuja Cement provided this information in its exchange filing.

After the acquisition, the Adani family invested ₹5,000 crore in Ambuja Cement through convertible warrants on October 18, 2022. Additionally, 22 days prior, on March 28, 2024, the Adani family invested ₹6,661 crore, increasing their stake by 3.6% to 66.7%.