• Ambuja Cements acquires a 46.8% stake in Orient Cement Ltd, a deal valued at Rs 8,100 crore.
• The acquisition is expected to reduce logistics costs and improve Ambuja's market share.
• OCL's assets include a 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity, with potential for increase.
• The acquisition expands the Adani Group's cement footprint and sets the stage for future growth and expansion.

In a significant development in the Indian cement industry, Ambuja Cements, a part of the diversified Adani Group, has announced the acquisition of a 46.8% stake in Orient Cement Ltd (OCL). The deal, valued at an equity value of Rs 8,100 crore, is set to be fully funded through internal accruals. This strategic move is expected to complement Ambuja's existing cement footprint, leading to a reduction in overall lead distances and logistics costs for the cement business. It is also projected to improve the company's market share in its core markets.

Karan Adani, Director of Ambuja Cements, expressed his views on the acquisition, stating, "This timed acquisition marks another significant step forward in Ambuja Cements' accelerated growth journey, increasing cement capacity by 30 million tonnes per annum (MTPA) within two years of Ambuja's acquisition." He further added that the acquisition of OCL will position Ambuja to reach a cement capacity of 100 MTPA in FY25, expanding Adani Cements' presence in core markets and improving its pan-India market share by 2 per cent.

OCL's Assets and Future Plans

OCL, the newly acquired entity, boasts of a 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity. It also has statutory clearance to increase the clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA. Furthermore, OCL holds a limestone mining lease in Chittorgarh for setting up an Integrated Unit (IU) with clinker of 4 MTPA and a split Grinding Unit (GU) of 6 MTPA in North India.

Karan Adani highlighted the efficiency of OCL's assets, which are equipped with railway sidings and supported by captive power plants, renewable energy, WHRS and AFR facilities. He emphasized that OCL's strategic locations, high-quality limestone reserves, and requisite statutory approvals present an opportunity to increase cement capacity in the near term to 16.6 MTPA.

OCL has also secured a concession from MPPGCL, Madhya Pradesh for setting up a Grinding Unit within the premises of the Satpura Thermal Power Plant. This addition is expected to complement the Adani Group's existing cement footprint.

Stakeholders' Confidence and Future Prospects

CK Birla, Chairman of Orient Cement and the CK Birla Group, expressed confidence in the Adani Group, stating that with its strong focus on cement and infrastructure, it is the ideal new owner to drive continued growth at Orient Cement for the benefit of its people and stakeholders.

With this acquisition, Ambuja, along with its subsidiaries ACC Ltd, Penna Cement Industries Ltd, and Sanghi Industries Ltd, has taken the Adani Group's cement capacity to 88.9 MTPA. The group now boasts of 20 integrated cement manufacturing plants, 20 cement grinding units, and 12 bulk terminals across the country.

The transaction is subject to regulatory approvals, including approval by the Competition Commission of India and mandatory open offer under the relevant SEBI regulations. Once completed, this acquisition will further solidify the Adani Group's position in the Indian cement industry, paving the way for future growth and expansion.