Ambuja Cements, owned by the Adani Group, is set to acquire a majority stake in the operations of Sanghi Industries in a deal estimated to be around 60 billion rupees ($729 million). The official announcement is expected to be made on Wednesday, according to Reuters’ sources. Ambuja Cements, one of India’s leading cement companies, aims to strengthen its presence in the cement industry through this acquisition.
The Adani Group, which is India’s second-largest cement producer after UltraTech Cement, owns Ambuja Cements and its subsidiary ACC Ltd. Together, they have the capacity to produce more than 65 million tonnes with multiple manufacturing plants across India. Ambuja Cements recently reported a 31% YoY increase in consolidated profit for the June 2023 quarter.
The growth was attributed to strong demand for their premium cement products, as well as synergies with Adani Group companies, which lowered input costs and boosted EBITDA growth. On the other hand, Sanghi Industries, enjoying its dominance in Gujarat, has a production capacity of 6.1 million metric tonnes per annum and has plans to explore greenfield opportunities in the cement sector.
In conclusion, the Adani Group’s Ambuja Cements’ decision to acquire a majority stake in Sanghi Industries is a strategic move to strengthen its position in the cement industry. The deal, estimated to be around 60 billion rupees, reflects the company’s commitment to expanding its presence and leveraging synergies within the Adani Group. With Ambuja Cements’ solid financial performance and Sanghi Industries’ dominance in Gujarat, this acquisition holds the potential to further consolidate their market position and drive growth in the competitive cement sector in India. As the official announcement of the deal is awaited, the industry will closely monitor the developments and its impact on the cement market dynamics.
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