Ambuja Cements, the cement and building material company and part of Adani Group, has announced plans to merge its subsidiaries Sanghi Industries and Penna Cement Industries.
The move is aimed at consolidating operations and strengthening the company’s foothold in the cement sector. The merger is expected to enhance operational efficiency and bolster Ambuja Cements’ market presence, as reported by various media sources.
As part of the merger plan with Sanghi Industries, Ambuja Cements will issue 12 equity shares of the face value of ₹2/- each for every 100 equity shares of SIL of face value ₹10/- each as recommended by the valuers and accepted by the Board and thereby, the eligible shareholders of SIL will become the shareholders of Ambuja Cements.
With a 58.08% stake in Sanghi Industries, Ambuja, a part of the Adani Group, aims to fully integrate the subsidiary to enhance operational efficiency and drive growth.
SIL has a clinker capacity of 6.6 MTPA, a cement capacity of 6.1 MTPA, and limestone reserves of ~1 billion tonnes. SIL’s Sanghipuram plant is India’s largest single-location cement and clinker unit by capacity, with a captive jetty and captive power plant.
Penna has four integrated plants in Andhra Pradesh and Telangana, along with a grinding unit in Maharashtra. It has an operational capacity of 10 MTPA. Additionally, two plants, with a capacity of 2 MTPA each, are under construction in Krishnapatnam and Jodhpur, expected to be completed within next 8-12 months. It also has five bulk cement terminals at Kolkata, Gopalpur, Karaikal, Kochi, and Colombo (Sri Lanka).
Ambuja Cements is set to significantly boost its production capacity through the merger. Post-merger, the company’s capacity is expected to exceed 100 million tonnes per annum (MTPA) by the end of the fiscal year, up from its current 89 MTPA. Ambuja has outlined plans to further expand its capacity to 140 MTPA by 2027-28.
Ajay Kapur, CEO – Cement Business, Adani Group, said, “This merger aims to make our company more competitive and efficient, ultimately enhancing shareholder value. Enhanced working capital management and internal funds will support the growth of our business operations. Unified cash flow management will pool resources for faster expansion and cost savings in administration and governance, thereby simplifying compliance requirements. This advancement through a larger entity will increase market competitiveness and deliver greater value to our shareholders.”
