Ambuja Cements is acquiring My Home Group’s 1.5-million-tonne cement grinding unit at Tuticorin in Tamil Nadu for a total value of Rs 413.75 crore.
The grinding unit is spread across 61 acres near the Tuticorin Port with a long-term fly ash agreement.
ACL said in a press statement that the acquisition, which will be funded through internal accruals, will be value accretive from the beginning.
The company will leverage the coastal footprint apart from the state-of-the-art marine infrastructure and equipment.
ACL, which is now part of the Gautam Adani group, added that the acquisition will also aid in enhancing the conglomerate’s footprint across the southern states of Tamil Nadu and Kerala. Following the acquisition, the group’s capacity will rise to 78.9 million tonnes.
Shares of Ambuja Cements on Monday ended with losses of 0.47 per cent, or Rs 2.85, at Rs 606.80 on the BSE.
“In addition to the infrastructure and geographical advantages, Ambuja Cements will also inherit the existing dealer network and retain current employees, facilitating a smooth transition and enabling the rapid ramp-up of utilisation,” said Ajay Kapur, CEO of cement business, Adani Group.
Ambuja Cements said that the limited availability of limestone in Tamil Nadu presents a unique competitive advantage with the coastal movement of clinker from the Sanghipuram Plant, ensuring cost-efficient operations.
In a recent presentation, the Adani group said that Ambuja Cements and ACC Ltd are jointly targeting to capture around one-fifth of the Indian cement market by 2024-28.
It added that the cement business will implement an accelerated capex programme through internal accruals and the business will continue to remain debt-free. It is targeting to have an annual capacity of 140 million tonnes by 2027-28.
According to the presentation, Adani Cement’s market share could touch 20 per cent by 2027-28 from the current 14 per cent.
Before the latest acquisition, Ambuja Cements and ACC Ltd had 18 integrated cement manufacturing plants and a similar number of cement grinding units across the country.
