In a major development in India’s cement sector, Ambuja Cements, part of the Adani Group, has received its board approval for two schemes of amalgamation to merge ACC and Orient Cement with itself. The move marks a key step toward creating a single, consolidated cement platform under the Adani Group, Ambuja Cements said in a release last night.

The company also highlighted that the amalgamation aligns with its broader stakeholder-centric approach, as the proposed mergers of Sanghi Industries and Penna Cement with Ambuja are already at various stages of approval.

As per the company, the proposed restructuring aims to simplify the group’s cement business, strengthen scale, and unlock operational and financial synergies across the portfolio.

Cheering the announcement, shares of Ambuja Cements rose as much as 4.3% to ₹563.25 on the BSE, lifting its market capitalisation to ₹1.37 lakh crore. In a similar move, Orient Cement shares jumped nearly 6%, while ACC slipped nearly 1% in opening trade. Shares of Sanghi Industries also gained over 3% in an otherwise muted broader market.

Meanwhile, the equity benchmarks – BSE Sensex and NSE Nifty - opened on a muted noted with a negative bias.

Merger to create single consolidated cement platform

The merger will bring ACC and Orient Cement under a unified corporate structure, while the Ambuja and ACC brands will continue to operate independently in their respective markets.

According to the company, the consolidation is expected to deliver operational benefits through optimisation of manufacturing and logistics networks, streamlined corporate structures, and more efficient capital allocation. Ambuja said the rationalisation of network, branding and sales promotion spends would help optimise costs and improve margins by at least ₹100 per tonne.

The proposed merger will be done through share-swap arrangement. Ambuja will issue 328 equity shares of face value ₹2 each for every 100 equity shares of ACC with a face value of ₹10 each. For Orient Cement shareholders, Ambuja will issue 33 equity shares of face value ₹2 each for every 100 equity shares of Orient Cement with a face value of Re 1 each. The transaction involves no cash consideration and is subject to regulatory and shareholder approvals, with completion expected over the next one year.

Karan Adani, Non-Executive Director at Ambuja Cements, said the consolidation represents a “transformational step” toward building a globally competitive and integrated cement and building materials organisation. “By bringing Ambuja Cements, ACC, and Orient Cement under a single corporate structure, we are strengthening our ability to drive operational excellence, accelerate growth, and deliver sustainable long-term value,” he said, adding that the combined entity would be supported by a robust and resilient balance sheet.

Analysts positive on long-term value

Brokerages viewed the announcement as a long-awaited move to simplify the Adani Group’s cement structure, with a largely neutral-to-positive impact on valuations.

Emkay Global said the amalgamation of ACC and Orient Cement with Ambuja would create a single cement platform and deliver operational synergies by optimising logistics, strengthening the balance sheet and enabling efficient capital allocation. The brokerage noted that commercial operations were already being run as a consolidated unit under a master supply agreement, and therefore expects the merger to have a largely neutral impact on estimates, with a positive bias.

Emkay retained its ‘ADD’ rating on Ambuja Cement with an unchanged target price of ₹650.

Motilal Oswal also termed the move a strategic step toward simplifying the group structure and driving long-term value. The brokerage noted that the merger ratios imply an almost at-par valuation for ACC at current market prices, while Orient Cement shareholders receive a premium of about 9%.

While the deal appears neutral for ACC, the brokerage believes it is positive for Ambuja shareholders, citing the valuation gap between Ambuja and ACC. It said the consolidation removes uncertainty around merger timelines and strengthens Ambuja’s ability to drive synergies across its cement portfolio.

Motilal Oswal maintained a constructive view on Ambuja, highlighting steady improvements in profitability, successful integration of acquired assets, and the benefits of rising scale and capital efficiency.

The merger will result in an equity dilution of about 12% for Ambuja, with the promoter group’s stake in the company falling to 60.94% from 67.65% after the amalgamation of all the companies mentioned above, it said.

“The transaction represents a step towards simplifying the group’s cement structure and is in line with management’s stated focus on consolidation, scale, and capital efficiency,” it said in a report.

The brokerage valued Ambuja at 20x Sep’27E EV/EBITDA, arriving at a target price of ₹750, and said the amalgamation would enhance balance sheet flexibility and long-term shareholder value.

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