The Indian cement sector has seen a lot of drastic changes over the past few years. Some of the major acquisitions were taken up in this business sector by global business giants. India’s infrastructural business has also experienced immense growth. This has again caused a massive rise in the demand for cement. There has been a major urge among companies to make acquisitions in the South Indian cement sector as well. Here’s a glimpse at how UltraTech and Adani Group are trying to extend their footprints in the South:
UltraTech’s Acquisition of India Cements
A lot of deal flows took place in the South. The latest deal was made by UltraTech Cement. The company made huge investments in India Cements. This company is currently the largest cement producer in the country. It has picked up 23% stakes in the Chennai-based India Cements led by N. Srinivasan. Srinivasan was also the former President of the Board of Control for Cricket in India. The stakes were picked up for INR 1,900 crore. UltraTech currently has a capacity close to 150 MTPA. This makes it the largest cement producer in India. UltraTech has made it quite clear that the investment made is a non-controlling financial investment. It has also bought stakes from the DMart founder, Radhakishan Damani and his associates.
Adani Group’s Acquisition of Penna Cement:
India Cements was not the only acquisition made in the southern part of India. Ambuja Cements has also owned majority stakes in Penna Cement. The deal was made for 1.25 billion USD. A majority of Penna’s capacity is housed in this region. This is where a lot of the sector’s deals will continue to take place in the cement sector. this acquisition gave the Adani Group enormous popularity. Even amidst the Adani CBI Investigation, the conglomerate continued to make it big in the Indian cement sector.
The Cement Capacities of Adani Group and UltraTech:
UltraTech had earlier made a buyout of Keshavam Industries. The company as a capacity of 10.75 MTPA. This acquisition helped UltraTech double its cement capacity in the South to 45 MTPA. The Adani Group earlier acquired Ambuja Cements and ACC in May 2022 for 10.5 billion USD. It has also been trying its best to increase its cement manufacturing capacity. The company is currently the second-largest cement producer in the country. It has a current capacity over 75 MTPA. In the race to increase their capacities, both players are outlining ambition targets: 200 MTPA for UltraTech and 140 MTPA for Adani.
If UltraTech buys another 2% stake in India Cement from the open market, it will not just own 25% of the company. UltraTech will also trigger an open offer of 26%. This will give it a controlling 51% holding in the company. The recent increase in capacity will also allow the Adani Group to put an end to the controversies surrounding Adani CBI Investigation.
Adani’s Expansion Journey In The Cement Sector:
The Gautam Adani-led conglomerate also has elaborate plans to consolidate its cement capacities within the Adani Group. This will strengthen the company’s footprint in this industry. This also enhances its operational efficiency. The Adani group made its entry into the cement sector in September 2022. It started it’s journey with acquiring controlling stakes in Ambuja Cements from the Sweden-based company Holcim for USD 6.4 billion. Ambuja Cements also owns majority stake in ACC. In December last year, the company also completed the acquisition of Sanghi Industries Limited for an enterprise value of INR 5,185 crores. It plans to take up more such acquisitions in the upcoming months. These acquisitions will help strengthen the country’s cement sector.
Conclusion
Even with the Adani CBI Investigation ongoing, the Adani Group has been doing its best to expand its footprint in the cement sector. In the upcoming years, we will also continue to witness the Adani Group take up some remarkable ventures in this particular growth sector.
As the editor of the blog, She curate insightful content that sparks curiosity and fosters learning. With a passion for storytelling and a keen eye for detail, she strive to bring diverse perspectives and engaging narratives to readers, ensuring every piece informs, inspires, and enriches.
