Ambuja Cements of Adani Group Buys Penna Cement for Rs 10,422 Crores
Adani Group's Ambuja Cements has just made a big move by acquiring Penna Cement for a whopping Rs 10,422 crore. This acquisition is part of Ambuja Cement's plan to reach a capacity of 140 million tonnes per year by 2028.
Mumbai: Adani Group’s Ambuja Cements has just made a big move by acquiring Penna Cement for a whopping Rs 10,422 crore. This acquisition is part of Ambuja Cement’s plan to reach a capacity of 140 million tonnes per year by 2028.
Ambuja Cements will be taking over the entire stake of Penna Cement Industries Ltd (PCIL) from the P. Pratap Reddy and family, who are based in Hyderabad. The acquisition will be financed through internal funds.
By acquiring PCIL, Ambuja Cement aims to increase its market share by 2% across India and an impressive 8% in the southern region. This is a major milestone for Ambuja Cement’s growth journey, according to Ajay Kapur, the CEO and Whole Time Director of Ambuja Cement.
PCIL currently has a cement capacity of 14 million tonnes per year, out of which 10 million tonnes is already operational. The remaining capacity is under construction in Krishnapatnam (2 million tonnes) and Jodhpur (2 million tonnes), and will be completed within the next 6 to 12 months. The strategic location and abundant limestone reserves of PCIL offer opportunities for further cement capacity expansion through debottlenecking and additional investments.
One exciting aspect of this acquisition is the access it provides to the eastern and southern parts of peninsular India, as well as a potential entry into Sri Lanka through the sea route. Ambuja Cement’s existing dealers will join forces with PCIL’s market network, resulting in a powerful synergy.
In the fiscal year 2024, the Adani Group successfully completed three other acquisitions (Sanghi, Asian Cements, and GU in Tuticorin), resulting in a total cement capacity increase of 11.4 million tonnes per year, bringing the total capacity to 78.9 million tonnes.
On another note, Ambuja Cements has reported a record-breaking 119% increase in profit after tax (PAT) at Rs 4,738 crore for FY24 compared to the previous year, with operating EBITDA reaching Rs 6,400 crore, a 73% increase.
This acquisition marks an important milestone for Ambuja Cement as it continues to solidify its position as a leading player in the cement industry, especially in south India. The future looks bright for Ambuja Cement as it expands its market presence and continues its upward trajectory in the coming years.
