Ambuja Cements Ltd, part of the Adani Group, has announced that it will acquire a 46.8 percent stake in Orient Cement Ltd, at an equity value of Rs 8,100 crore. The deal will be executed through the purchase of shares from the promoters of Orient Cement as well as certain public shareholders, at Rs 395.4 per share.
The acquisition will be carried out in two stages: Ambuja Cements will acquire 37.9 percent from Orient Cement’s promoters and an additional 8.9 percent from certain public shareholders, the Adani group company said in a stock exchange filing. Following this, Ambuja plans to launch an open offer for 26 percent of Orient Cement’s expanded share capital at the same price per share.
This acquisition will add up to 16.6 million tonnes per annum (MTPA) of cement capacity to Ambuja, including 8.5 MTPA currently operational, and another 8.1 MTPA under development.
Ambuja Cements' share price was trading in green at Rs 575.15 on NSE, up 0.6 percent from the previous close. On the other hand, Orient Cement's share price fell nearly 1 percent to Rs 347, after yesterday's 6 percent gain.
The deal brings Ambuja closer to its target of achieving over 100 MTPA of cement capacity by FY25, with a longer-term goal of reaching 140 MTPA by 2028. Additionally, it provides Ambuja with 6 MTPA of potential capacity expansion in North India, thanks to Orient Cement’s limestone reserves in Rajasthan, it said.
Karan Adani, Director of Ambuja Cements, said that this acquisition is part of the company's accelerated growth plan, noting, "By acquiring Orient Cement, Ambuja is well-positioned to reach 100 MTPA cement capacity in FY25."
Orient Cement's promoter, CK Birla, said that the group’s strategy is to reallocate capital to focus on consumer-centric and technology-driven businesses, while Amita Birla expressed confidence in the deal’s long-term benefits for employees and stakeholders.
Mangesh Bhadang, Senior Vice President, of Centrum Broking said that he sees this development "very positively, not only for Ambuja but also for the cement industry specifically for the southern region."
Ambuja will fund the acquisition entirely through internal accruals, maintaining its debt-free status. Orient Cement’s strategic assets, including its operational plants in Telangana, Karnataka, and Maharashtra, will complement Ambuja’s existing footprint, reducing logistics costs and improving overall market share by 2 percent pan-India.
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