Ambuja Cement Acquires Penna Cement, Expanding Market Footprint

On June 13, 2024, Ambuja Cement, an essential entity within the Adani Group’s diversified portfolio, confirmed the signing of a definitive agreement to acquire Penna Cement Industries Ltd (PCIL). This acquisition, valued at ₹10,422 crore in enterprise terms, entails Ambuja Cement acquiring 100% of PCIL’s shares from its current promoter group led by Mr P. Pratap Reddy and his family.

“This landmark acquisition is a significant step forward in Ambuja Cement’s accelerating growth journey,” said Mr Ajay Kapur, CEO and Whole Time Director of Ambuja Cement.

He further added, “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 be a game-changer by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka through the sea route. We aim to make PCIL highly competitive in cost and productivity and improve its operating performance.”

PCIL’s Production Capacity and Infrastructure

Penna Cement Industries Ltd boasts a substantial cement production capacity of 14 MTPA, with 10 MTPA currently operational. The remaining capacity is under construction, with 2 MTPA each being developed at Krishnapatnam and Jodhpur, expected to be completed within the next 6 to 12 months. Notably, about 90% of PCIL’s cement production facilities are equipped with railway sidings, facilitating efficient logistics operations.

Additionally, several plants benefit from captive power plants and waste heat recovery systems, enhancing operational sustainability and cost efficiency. The surplus clinker resources at PCIL’s Jodhpur plant are anticipated to enable an additional 3 MTPA of cement grinding capacity, further augmenting its production capabilities beyond the current 14 MTPA mark.

About Ambuja Cement Limited

Ambuja Cement Limited stands out as a cornerstone within India’s cement industry. It is renowned for its leadership under the Adani Group, the nation’s most significant and rapidly expanding conglomerate.

On June 14, 2024, the share price of Ambuja Cement Limited opened at ₹689.00, touching the day’s highest price of ₹689.00 as of 11:27 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.