08 Jan , 2024 By : Debdeep Gupta
Adani-owned ACC Limited said on January 8 that it will acquire the remaining 55 percent stake in Asian Concretes and Cements Private Limited (ACCPL) from an existing promoter at an enterprise Value of Rs 775 crore, as the cement and building materials firm looks to boost capacity amid robust demand. ACC currently holds a 45 percent stake in the company.
The acquisition is value accretive considering it will balance Adani Cement’s clinker facilities in north India, the company said in a BSE filing adding that the deal will be fully funded through internal accruals.
Analysts expect that the big boys of the cement industry will continue to take over smaller companies and consolidate to protect and gain market share on expectations of robust demand driven by increased spending on infrastructure projects in the country.
Also read: Cement industry ‘under construction’ as leader protects market amid high M&A activity
"This acquisition reinforces Ambuja and ACC’s market leadership, elevating Adani Group’s overall cement capacity to 77.40 MTPA (million tonnes per annum)," said Ajay Kapur, chief executive officer of ACC.
"With ongoing and planned CAPEX investments, the Adani Group's cement capacity is poised to reach 106 MTPA by FY 2026," Kapur added.
Billionaire Gautam Adani’s big-bang entry into cement with the $10.6 billion acquisition of India’s second-biggest cement business (Ambuja Cement and ACC) from Holcim Group of Switzerland last year marked the arrival of an aggressive challenger in the cement industry.
ACCPL has Cash & Cash Equivalent of Rs. 35 crore. Its total cement capacity, along with that of its subsidiary Asian Fine Cements Pvt Ltd, is 2.8 MTPA, according to the statement.
As of now, ACC has 20 cement manufacturing sites, and over 82 concrete plants. The company aims to reach the target of 140 MTPA capacity of Adani’s Cement Business by 2028.
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