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March 28, 2024

Adani Family Boosts Investment in Ambuja Cements with Rs 6,661 Crore Infusion, Elevating Stake to 66.7%

The Adani family, renowned promoters of Ambuja Cements, have announced a significant infusion of Rs 6,661 crore into the company, marking a notable increase in their stake by 3.6 percent, thereby reaching a substantial holding of 66.7 percent in the nation’s second-largest cement entity.

This substantial financial boost signifies a strategic move by the Adani Group, aimed at reinforcing its cement business. Ambuja Cements, owned by billionaire Gautam Adani, intends to leverage this investment to elevate its capacity to 140 million tonnes per annum by the year 2028, as stated in an official release.

The recent infusion of funds follows a prior investment of Rs 5,000 crore by the promoters, sanctioned by the board in October 2022, thereby demonstrating their commitment to the company’s growth trajectory.

“With this latest investment, the Adani family has further solidified their position in the company, augmenting their stake by 3.6 percent to attain a commanding 66.7 percent holding,” affirmed Ambuja Cements, which also holds a controlling interest in another leading cement firm, ACC Ltd.

Cumulatively, the promoters have injected a substantial sum of Rs 11,661 crore into Ambuja post-acquisition, furnishing the company with enhanced capital flexibility to accelerate growth, manage capital effectively, and fortify its balance sheet, facilitating the realization of various strategic objectives, as highlighted in the statement.

Ajay Kapur, CEO of Ambuja Cements, emphasized that this infusion of funds presents a remarkable opportunity for accelerated growth, capital management optimization, and the consolidation of a robust balance sheet. Kapur remarked, “It not only underscores our steadfast belief in our vision and business model but also reaffirms our commitment to delivering sustainable long-term value to our stakeholders. This infusion will drive us towards setting new industry benchmarks, accelerating growth, and sustaining operational excellence.”

Furthermore, this investment is poised to fuel several strategic initiatives, including debottlenecking capital expenditure to enhance operational efficiency and scalability. Additionally, it will facilitate the integration of advanced technologies to drive innovation and product enhancement, catering to the evolving demands of the sector.

Ambuja Cements, along with its subsidiary ACC Ltd, boasts a formidable capacity to produce 77.4 million tonnes of cement annually, leveraging 18 integrated manufacturing plants and 18 cement grinding units spread across the country. The recent acquisition of Sanghi Industries Ltd further reinforces its market presence and growth prospects.

In a landmark move in September 2022, the Adani Group acquired controlling stakes in Ambuja Cement from Swiss firm Holcim for a cash transaction valued at USD 6.4 billion (approximately Rs 51,000 crore). Subsequently, the group launched a Rs 31,000 crore open offer to acquire an additional 26 percent stake from public shareholders, underscoring its commitment to bolstering its position in the cement industry.

In essence, the infusion of Rs 6,661 crore by the Adani family underscores their unwavering confidence in the growth potential of Ambuja Cements, propelling the company towards a trajectory of sustained expansion, innovation, and market leadership in the dynamic cement sector landscape.

Jhumpa Lahiri

Jhumpa Lahiri

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