The Adani family has infused ₹6,661 crore into Ambuja Cements, raising its stake by 3.6% to 66.7%. This is the second fund infusion since late-2022 when the promoter had invested ₹5,000 crore into the company through warrants.
“With this, promoters have infused ₹11,661 cr in Ambuja post acquisition, giving it capital flexibility for accelerated growth, capital management initiatives and best-in-class balance sheet strength to accomplish various strategic initiatives,” the company said in a statement.
Adani Cement – comprising ACC and Ambuja Cements – aims to have production capacity of 140 million tonne (mt) by 2028. The country’s second-largest producer of cement currently has the capacity to produce over 77 mt of cement a year.
Apart from helping reach this capacity target, the funds will be instrumental for various strategic initiatives, including debottlenecking for operational efficiencies and bringing in efficiencies across resources and supply chain, the company said in a statement.
The fresh investment comes through promoter entity Harmonia Trade and Investment which converted 212 million warrants into Ambuja shares. The cement company’s board on Thursday approved the conversion. The announcement came during market hours, sending the shares of Ambuja Cements nearly 2% higher on the NSE to ₹612.35.
“We are thrilled to announce Adani family’s decision to increase their stake in Ambuja,” said CEO Ajay Kapur. “This infusion of funds provides Ambuja capital flexibility for fast-tracked growth, capital management initiatives and best-in-class balance sheet strength,” he said.
Barclays Bank PLC, MUFG Bank and Standard Chartered Bank were the advisors for the transaction.
The Adani group forayed into the cement space by acquiring Ambuja Cements and ACC in 2022 for more than $10 billion from Holcim. It was the largest acquisition in the materials space.
Apart from Adani Cement, several other players are adding capacities as they expect demand for cement to remain robust over the next few years, helped by government-led spending on infrastructure.
Source: Economic Times