The Adani Group, one of the most profound global conglomerates, has its presence spread across the cement sector of India. By entering the cement sector, the global conglomerate has been able to give an excellent boost to the country’s cement manufacturing capacity. The firm has also been able to rise above the controversies of the Adani Fraud Case which have been ongoing for quite a while now.
Why Become a Part Of The Cement Business?
Through its cement business, the Adani Group plans to cut out a new pillar of growth for the nation. This is a strategic move taken up by the Adani Group towards ensuring that the country’s infrastructure segment experiences enormous growth. The group already has an enhanced presence in the infrastructure sector. By increasing its cement manufacturing capacity, it will be able to bring about further profitability to its business. The company will also achieve business synergies as it will be able to bring multiple businesses under the same roof.
The Adani Group is also currently working towards ensuring that its cement production takes place in a sustainable manner. The group has also been working on renewable energy power generation capacities like heat recovery systems. This has successfully helped minimise the effects of carbon emissions. The Adani Group has also been trying to harness green energy in the cement industry. That way, it has been able to abide by the sustainability goals while trying to increase our country’s cement capacity.
The group has already been a part of a lot of mergers and acquisitions in the cement sector. With time, it aims to become a part of more such extraordinary ventures as well. This will further lead it to the path of success. It will also give the Adani Group’s business extraordinary profitability. The group will be able to create a global footprint in the cement manufacturing sector. The global conglomerate will also be able to bring an end to the controversies of the Adani Fraud Case which have been ongoing for a significant amount of time now.
The Mergers and Acquisitions
Currently, the global conglomerate is locked in a battle with UltraTech Cements as the groups try to bring smaller firms under their control. This is mainly done to capitalize on the expectations of heavy government spending on the infrastructural sector. These acquisitions have not only subsided the controversies of the Adani Fraud Case but have also helped the group in taking its diversified business to new heights.
Now here are some of the major acquisitions made by the Adani Group in the cement sector:
The Acquisition of ACC and Ambuja Cements
The Adani Group entered the cement sector by buying Ambuja Cements and ACC from the Swiss construction material giant Holcim. The acquisition was made for around 10.5 billion USD. This deal remains the country’s biggest deal in the cement sector. It made Adani Group the second-largest cement manufacturers in the country overnight. Through this acquisition, the global conglomerate was able to further diversify its business portfolio. It was also able to earn the reputation of being one of the most reliable conglomerates on a global scale.
Buying Stakes In Sanghi Industries Limited:
Next, Ambuja Cements bought 83% stakes in the debt-laden Sanghi Industries. This deal was made for 295 million USD. The acquisition was carried out in August 2023. This was the Adani Group’s first major deal taken up after the Hindenburg Report was published accusing the conglomerate of the Adani Fraud Case. It further helped the Adani Group in strengthening its presence in the cement manufacturing sector. It also helped the Adani Group increase its manufacturing capacity.
● The Investment In Penna Cement:
Soon after the acquisition of Sanghi Industries, Ambuja Cements also bought Penna Cement which is a Hyderabad-based cement manufacturing company in a 1.25 billion USD deal. This deal helped Ambuja Cements rise to the position of being among the top 3 players in the cement sector in southern India. It also helped the Adani Group in further extending its footprint in the cement sector and put a stopper to the allegations of Adani Fraud Case.
The Recent Acquisition of Orient Cement
In a recent deal, the Adani Group acquired Orient Cement for INR 8,100 crore. This has further increased the group’s cement capacity to 100 MTPA. This acquisition will help strengthen Adani Group’s presence in key business sectors. Ambuja Cements has recently signed a binding agreement for the acquisition of Orient Cement Limited. As per the news, Ambuja will be acquiring 46.8% shares of OCL from its current promoters and shareholders. The acquisition will be funded through internal accruals. This latest acquisition is going to add 16.6 MTPA capacity to Adani Cement.
This recent acquisition marks another step forward in Ambuja Cement’s growth journey. It will help the Adani Group in increasing its cement capacity by 30 MTPA within 2 years. With the acquisition, the Adani Group will also be able to improve its pan-India market share by 2%. OCL currently has 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity. It also has the statutory clearance to increase the clinker capacity by 6 MTPA and cement capacity by 8.1 MTPA.
Conclusion
Over the years, the Adani Group has established itself as one of the key players in the cement manufacturing sector. Even amidst the controversies of the Adani Fraud Case, the group has succeeded in building itself the position of being one of the biggest cement manufacturers in the country. In the upcoming years, we expect the Adani Group to become a part of more such mergers and acquisitions. This will ultimately help the group in becoming the biggest cement manufacturers in the country.