Adani Group acquires Penna Cement at Rs 10,422 crore
Jun 13, 2024
New Delhi [India], June 13 : Ambuja Cement, the cement and building material company of Adani Cement and part of the diversified Adani Group, announced on Thursday that it has signed a binding agreement for the acquisition of Penna Cement Industries Ltd (PCIL) at an enterprise value of Rs. 10,422 crore.
According to the agreement, Ambuja will acquire 100 per cent shares of PCIL from its existing promoter group, P Pratap Reddy and family. The acquisition will be fully funded through internal accruals.
"This landmark acquisition is a significant step forward in Ambuja Cement's accelerating growth journey. By acquiring PCIL, Ambuja is poised to expand its market presence in south India and reinforce its position as a pan-India leader in the cement industry. PCIL's strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment" said Ajay Kapur, CEO & Whole Time Director of Ambuja Cement.
He further added "Importantly, the bulk cement terminals (BCTs) will prove to be a game changer by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route. We aim to make PCIL highly competitive on cost and productivity and improve its operating performance."
PCIL has 14 MTPA cement capacity, of which 10 MTPA (Millions of Tonnes Per Annum) is operational, and the remaining is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and will be completed within 6 to 12 months.
Around 90 per cent of the cement capacity comes with railway sidings, and some are supported by captive power plants and waste heat recovery systems.
Further, surplus clinker at the Jodhpur plant will support an additional 3 MTPA cement grinding capacity over and above 14 MTPA.
The agreement strengthens Adani Cement's Sea transportation logistics with five bulk cement terminals at Kolkata, Gopalpur, Karaikal, Kochi and Colombo to serve peninsular India and it will improve Adani Cement's market share pan India by approximately 2 per cent, South India by approximately 8 per cent.
