Ambuja Cements, part of the Adani Group, will acquire 100% of Penna Cement in a deal worth Rs 104.22 billion, announced. The acquisition will be fully funded through internal accruals. This transaction includes a cement capacity of 14 million tonnes per annum (MTPA) and an under-construction 4.0 MTPA capacity at Jodhpur IU and Krishnapatnam GU, which Penna Cement will complete.

Gautam Adani's $3 billion fund, aimed at dominating the cement market, will see a significant expenditure with this acquisition. This move will enhance Adani Group?s presence in South India and Sri Lanka, directly competing with UltraTech Cement. The company aims to boost its production capacity from the current 89 MTPA to 140 MTPA by 2028, including the 4 MTPA under construction.

Reports also suggest that Adani Group plans further acquisitions, including Saurashtra Cement, Jaiprakash Associates' cement business, and Vadraj Cement, potentially adding another 20.5 MTPA to Ambuja's capacity. These strategic moves are in line with India's growing infrastructure development under the Modi government, with Ambuja Cements aiming to increase its South India market share from 8% to 15% and its pan-India market share by 2%.

Additionally, the acquisition will strengthen Adani's logistics with five bulk cement terminals in Kolkata, Gopalpur, Karaikal, Kochi, and Colombo, facilitating better distribution across peninsular India. Following the announcement, Ambuja Cements' stock rose 4% to a new all-time high.

(Source: ET)