Adani group company Ambuja Cements acquires Sanghi Industries at enterprise value of ₹5,000 crore

Adani Group News: Ambuja Cements Ltd (ACL), a flagship Adani Group company, today announced the acquisition of Sanghi Industries Ltd (SIL) for an enterprise value of Rs 5000 crore. ACL will acquire 56.74 percent shares in SIL from its existing promoter group, Ravi Sanghi & family. The acquisition will be fully financed through internal accruals.

After the outbreak of this stock market news, Ambuja Cements' share price opened with an upside gap and continued to hit an intraday high of Rs 468.50 apiece on the NSE, logging more than 1.50 percent rise within minutes of the stock market opening today.

Sanghi Industries share price climbs to a 52-week high

Sanghi Industries' share price also rose during early morning deals. Sanghi Industries' share price opened the day higher and continued to hit an intraday high of Rs 105.40 apiece on the NSE, hitting a new 52-week high within a few minutes of stock markets opening bell on Thursday.

Acquisition of Ambuja Cements Sanghi Industries

Declaring the acquisition of Sanghi Industries, Gautam Adani, Chairman of Adani Group, said, "This landmark acquisition is an important step in Ambuja Cement's journey of exponential growth," adding, "By joining hands with SIL, Ambuja is poised to expand its market presence, strengthen its product portfolio and consolidate its position as a leader in the building materials sector. With this acquisition, the Adani Group is on track to achieve its target of 140 MTPA of manufacturing cement capacity by 2028 in advance. With SIL’s limestone reserves of billion tons, ACL will increase the cement capacity at Sanghipuram to 15 MTPA in the next two years. ACL will also invest in the expansion of the captive port in Sanghipuram to handle larger vessels. Our goal is to make SIL the most economical clinker production in the country.”

See Gautam Adani's tweet below:

Promise to double our cement capacity by 2028 on track. Delighted to announce addition of @CementSanghi, India's most efficient / lowest cost clinker manufacturer to Adani portfolio. As part of @AmbujaCementACL, Sanghi Cement (in our karmabhoomi Kutch) significantly leverages our… pic.twitter.com/pjcUZFN3IH

— Gautam Adani (@gautam_adani) August 3, 2023

SIL's integrated manufacturing unit at Sangipuram in the Kutch district of Gujarat is the largest single-site cement and clinker production unit in India by capacity. With 2,700 hectares of land, the integrated unit contains two kilns with a clinker production capacity of 6.6 million tons per year and a cement grinding unit with a capacity of 6.1 million tons per year. It has a 130 MW captive power plant and a 13 MW of Waste Heat Recovery System. The unit is also connected to a captive jetty at Sangipuram. 

The acquisition of SIL will help ACL to strengthen its leadership in the market and increase its cement production capacity from 67.5 million tons per year to 73.6 million tons per year. With an ongoing capex of 14 Mtpa and with 5.5 Mtpa operational at Dahej and Ametha by Q2 FY24, Adani Group's capacity will be 101 MTPA by 2025.

Given the Adani Group's strength in building and operating marine infrastructure, the port at Sanghipuram will be expanded to handle vessel sizes of 8,000 DWT (deadweight tonnage). Bulk terminals and grinding units will be established along the western coast to allow the transport of clinker and cement by sea at the lowest possible cost.

SIL also has a bulk cement terminal at both Navlakhi Port in Gujarat and Dharamtar Port in Maharashtra. Most of the cement is transported by sea, which is environmentally friendly and cost-effective. SIL has a network of 850 distributors, with a presence in the Gujarat, Madhya Pradesh, Rajasthan, Maharashtra, and Kerala markets.

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