Billionaire Gautam Adani and his family has completed an infusion of ₹20,000 crore in the group's cement arm, Ambuja Cements, by fully subscribing to its warrants program. Adani Family, the promoters of the company, has invested another ₹8,339 crore, raising its stake in the country’s second largest cement manufacturer by 3.6% to 70.3%. The fresh investment follows the infusion of ₹5,000 crore on October 18, 2022, and ₹6,661 crore on March 28, 2024, which was for part issuance of the shares.
“The promoters of the Company - Adani family has fully subscribed to the warrants program in the Company by further infusing ₹8,339 Cr thereby infusing a total amount of ₹20,000 Cr,” Ambuja Cements says in a release today.
As per the company, “this strategic move underscores unwavering commitment to have robust capital management philosophy for the portfolio companies and the latest investment testifies the commitment by Adani family to boost future prospects and potential of cement vertical.”
The additional investment will boost the company's financial position, providing it with enhanced capabilities to pursue its ambitious growth plans and capitalise on emerging opportunities in the market, the release notes.
"We are thrilled to announce completion of Adani family's primary infusion of ₹20,000 Cr in Ambuja," says Ajay Kapur, Whole Time Director and CEO, Ambuja Cements.
"This infusion of funds provides Ambuja, capital flexibility for fast-tracked growth, capital management initiatives and best-in-class balance sheet strength. It is not only testament to steadfast belief in our vision and business model but also reinforces our commitment to delivering long-term sustainable value creation to our stakeholders and this shall propel us towards setting new benchmarks accelerating our growth and continue to deliver on operational excellence, business synergies and cost leadership," Kapur adds.
The release highlights that the funds infusion will help the company to accomplish the capacity of 140 million tonnes per annum by 2028 by the cement vertical. Further, it will also enable various strategic initiatives including debottlenecking capital expenditure to enhance operational performance, as well as bringing efficiencies across resources, supply chain.
“This shall also drive innovation and product enhancement through advanced technology integration for better service offerings to tap the growing requirements of the sector driven by the growth in the Indian economy,” it noted.
Barclays Bank PLC, MUFG Bank, Mizuho Bank, and Standard Chartered Bank acted as advisors for the transaction.
Post the acquisition, in October 2022, the company had allotted 47.74 crore warrants to Harmonia Trade and Investment Limited, a part of the Adani Family, at an initial subscription amount of ₹104.72 per warrant, which was 25% of the issue price of ₹418.87. As per the deal, each warrant, convertible into one equity share, needed to be subscribed within 18 months from the date of allotment of warrants.
The development came two days after Ambuja Cements signed an agreement to acquire My Home Group's 1.5 million tonnes per annum (MTPA) cement grinding unit in Tuticorin, Tamil Nadu. The estimated cost of the acquisition is ₹413.75 crore, to be funded through internal accruals, will take Adani Group’s total cement capacity to 78.9 MTPA. Located near the Tuticorin Port, the asset will be value accretive as it will aid in enhancing Ambuja’s coastal footprint across southern markets of Tamil Nadu and Kerala.
In December last year, Ambuja Cements acquired Gujarat-based Sanghi Industries Limited (SIL), at an enterprise value of ₹5,185 crore.
Ambuja, with its subsidiaries ACC Ltd. and Sanghi, has taken the Adani Group’s cement capacity to 78.9 MTPA, with 18 integrated cement manufacturing plants and 19 cement grinding units across the country. The group aims to achieve 101 MTPA capacity by 2025 and 140 MTPA by 2028 through organic and inorganic growth.
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