The Adani Group is looking forward to acquiring Jaypee Group’s cement assets amidst the ongoing insolvency procedures. The urge to acquire the cement assets started after the rumours of the Adani scam subsided. The Adani Group has been deeply interested in expanding its cement business. It has taken up multiple acquisitions in this particular business sector. The company also has plans to increase its cement capacity in the upcoming years. The business group is presently strategizing to acquire Jaypee Group’s cement assets. The current cement manufacturing capacity of the firm is 9 million tons per annum. This will help increase the Adani Group’s cement business. The company will also be able to play it big in the infrastructure segment of India.
The Recent Acquisition
This acquisition of Jaypee Group’s cement assets has come into the picture as the lenders have initiated bankruptcy and insolvency proceedings against Jaiprakash Associates. The Adani Group is currently the second-largest cement producer in India. This was followed by its acquisition of Ambuja Cements and ACC. The company led by Gautam Adani has been actively looking forward to boosting its cement business. It has elaborate goals of capturing one-fifth of India’s cement market by FY27-28. The Adani Group has also recently acquired Penna Cement, a Hyderabad-based cement company. With this acquisition, it has extended its presence in the South Indian cement sector. The conglomerate has also been able to put a stopper to all the rumours centred around the Adani scam. It was also able to rise above its competitors easily.
The Corporate Insolvency Process
On 3rd July 2024, the National Company Law Tribunal in Ahmedabad admitted Jaiprakash Associates Limited for corporate insolvency. The decision was made after ICICI Bank applied for debt resolution in September 2018. This application was filed under the Insolvency and Bankruptcy Code 2016. The State Bank of India also took a step against Jaiprakash Associates Limited. They claimed the total default of INR 6893.15 crore as of 15th September 2022. The insolvency proceedings were stagnant for nearly 6 years. They have created an opportunity for the Adani Group to acquire Jayaprakash Group’s cement assets. This would also include the acquisition of limestone mines and a power plant. The plan is still in the initial process; the bankruptcy proceeding is also in its early stages. The committee of creditors has just met once. No further sales process has been initiated.
How Will The Acquisition Help The Adani Group?
The Adani Group is one of the most potential candidates for acquiring the cement assets of the company. This will give the Adani Group’s cement business a boost. The company will also be able to stay above its competitors. Jaiprakash Associates has long been trying to reduce its debt by selling its cement plants. A significant portion of its cement business was acquired by UltraTech in 2016. This acquisition was made for INR 16,000 crore. This added 22.4 MTPA capacity to UltraTech’s portfolio. The remaining units retained by the group are now under the radar of the Adani Group. In May 2014, Jaiprakash Associates defaulted on loans worth INR 4,616 crore. This included a principal amount of INR 1,751 crore and an interest of INR 2,865 crore. These default values highlight the urgency of the insolvency proceedings. It also focuses on the potential for further asset acquisitions.
Conclusion
The acquisition of Jaypee Group’s cement assets is going to intensify the competition between the other major players in the cement industry. This includes big names like the UltraTech and Adani Group. It will also bring about rapid growth in the infrastructure development of the country. With increased cement production, our country will no longer have to depend on exports to carry out its business operations. This will help improve our country’s economic stability to a significant extent. We will also be able to take our country to the peak of success within a very short period. The Adani Group will also be able to bring an end to the accusations of Adani scam and build itself an excellent reputation on a global scale.