Ambuja Cements to acquire 1.5 MTPA grinding plant in Tamil Nadu for ₹414 cr

Ambuja Cements, the cement and building material arm of Adani Group, on Monday signed an agreement to acquire My Home Group's 1.5 million tonne 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, the cement major says in an exchange filing today.

The plant is spread across 61 acres of land, with a long-term fly ash supply agreement for raw material sourcing. Ambuja Cements will leverage the coastal footprint and marine infrastructure and equipment, ensuring that the best quality products are delivered, the release notes.

“This acquisition provides access to the southern market customers with an opportunity to experience and instil their trust in one of the most iconic and trusted brands – Ambuja Cement. Furthermore, the limited availability of limestone in Tamil Nadu presents a unique competitive advantage with coastal movement of clinker from the Sanghipuram Plant ensuring cost-efficient operations,” the release highlights.

Ajay Kapur, CEO – Cement Business, Adani Group, says, "We are glad to announce this acquisition, strengthening our foothold in the region and aligning perfectly with our commitment to delivering high-quality products and services to our customers.”

“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 utilization,” he adds.

JM Financial Limited acted as the financial advisor to My Home Group on this transaction.

In December last year, Ambuja Cements acquired Gujarat-based Sanghi Industries Limited (SIL), at an enterprise value of ₹5,185 crore. The company expects the acquisition of SIL will help Ambuja strengthen its market leadership and increase its cement capacity. Sanghi’s integrated unit at Sanghipuram in Kutch Gujarat has a clinker capacity of 6.6 MTPA, cement capacity of 6.1 MTPA, and limestone reserves of 1 billion tonnes.

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.

Following the announcement, shares of Ambuja Cements rose as much as 0.9% to hit an intraday high of ₹609.65, while the market capitalisation climbed to ₹1.21 lakh crore. Early today, the cement stock opened lower at 597.55 against the previous closing price of ₹609.65 on the BSE. The stock slipped to a low of ₹593.20 but it rebounded 2.8% from the day’s lowest level after the deal announcement.