Ambuja Cements Acquires Penna Cement for Rs 10,422 Crore
Ambuja Cements, a key company under the Adani Group, has announced the acquisition of Penna Cement Industries Ltd (PCIL) for an enterprise value of Rs 10,422 crore. This strategic move aims to elevate Ambuja Cements' market presence in South India and support its target of reaching a cement production capacity of 140 million tonnes per annum (MTPA) by 2028.
The acquisition involves a 100% stake purchase from PCIL’s promoter group led by P. Pratap Reddy and family. It will be funded through Ambuja Cements' internal accruals. This transaction is expected to increase Adani Cement’s market share across India by 2% and significantly enhance its footprint in South India by 8%.
"This landmark acquisition is a significant step forward in Ambuja Cement’s accelerating growth journey", stated Ajay Kapur, CEO and Whole-Time Director of Ambuja Cements. He highlighted that acquiring PCIL positions Ambuja as a formidable leader in the cement industry and broadens its reach in South India.
PCIL currently operates with a cement production capacity of 14 MTPA, with 10 MTPA already operational. The remaining capacity, under construction in Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA), is expected to be completed within the next 6 to 12 months. PCIL’s strategically located facilities and extensive limestone reserves present opportunities for further capacity expansion through debottlenecking and additional investments.
Kapur emphasized the importance of PCIL’s bulk cement terminals (BCTs), which will enhance access to the eastern and southern parts of peninsular India and potentially open up routes to Sri Lanka via sea. This expansion is expected to create synergies by integrating PCIL’s existing dealer network into Adani Cement’s broader market framework.
In the fiscal year 2024, the Adani Group successfully concluded three acquisitions (Sanghi, Asian Cements, and GU in Tuticorin), boosting its cement capacity by 11.4 MTPA and taking the total to 78.9 MTPA.
Ambuja Cements reported a profit after tax (PAT) of Rs 4,738 crore for FY24, a 119% increase year-on-year. Its operating EBITDA rose by 73% to Rs 6,400 crore, reflecting robust financial performance and strategic growth initiatives.
The acquisition of PCIL is a critical component of Ambuja Cements' broader strategy to solidify its market leadership and drive substantial growth in the Indian cement industry.
The acquisition involves a 100% stake purchase from PCIL’s promoter group led by P. Pratap Reddy and family. It will be funded through Ambuja Cements' internal accruals. This transaction is expected to increase Adani Cement’s market share across India by 2% and significantly enhance its footprint in South India by 8%.
"This landmark acquisition is a significant step forward in Ambuja Cement’s accelerating growth journey", stated Ajay Kapur, CEO and Whole-Time Director of Ambuja Cements. He highlighted that acquiring PCIL positions Ambuja as a formidable leader in the cement industry and broadens its reach in South India.
PCIL currently operates with a cement production capacity of 14 MTPA, with 10 MTPA already operational. The remaining capacity, under construction in Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA), is expected to be completed within the next 6 to 12 months. PCIL’s strategically located facilities and extensive limestone reserves present opportunities for further capacity expansion through debottlenecking and additional investments.
Kapur emphasized the importance of PCIL’s bulk cement terminals (BCTs), which will enhance access to the eastern and southern parts of peninsular India and potentially open up routes to Sri Lanka via sea. This expansion is expected to create synergies by integrating PCIL’s existing dealer network into Adani Cement’s broader market framework.
In the fiscal year 2024, the Adani Group successfully concluded three acquisitions (Sanghi, Asian Cements, and GU in Tuticorin), boosting its cement capacity by 11.4 MTPA and taking the total to 78.9 MTPA.
Ambuja Cements reported a profit after tax (PAT) of Rs 4,738 crore for FY24, a 119% increase year-on-year. Its operating EBITDA rose by 73% to Rs 6,400 crore, reflecting robust financial performance and strategic growth initiatives.
The acquisition of PCIL is a critical component of Ambuja Cements' broader strategy to solidify its market leadership and drive substantial growth in the Indian cement industry.
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