Adani family pumps ₹6,661 cr into Ambuja Cements

The Adani family has infused ₹6,661 crore in Adani Cements, increasing the promoters' stake in the cement producer by 3.6% to 66.7%.

This follows the infusion of ₹5,000 crore by promoters into the company for exercising the warrants issuance approved by the board in October 2022.

With this, the promoters have infused ₹11,661 crore in Ambuja post acquisition.

The Adani family forayed into the cement industry by buying out Holcim's stake in Ambuja Cements and ACC in 2022. The value for the Holcim stake and open offer for Ambuja Cements and ACC was around $10.5 billion, making it the largest-ever acquisition by Adani. The deal also made Adani Group India's second-largest cement producer after Aditya Birla Group's Ultratech Cement.

The fund infusion will be instrumental in doubling the capacity to 140 million tonnes per annum by 2028, the cement maker says in a regulatory filing.

It will also be important in fuelling various strategic initiatives including undertaking debottlenecking capex to enhance operational capabilities to ensure scalability, as well as bringing efficiencies across resources, supply chain, the cement and building materials company says.

"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 the 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," says Ajay Kapur, wholetime director and CEO, Ambuja Cements.

Reacting to the development, shares of Ambuja Cements rose 2% to ₹616.30 in intraday trade on the National Stock Exchange (NSE). The stock has gained 70% over the past year and 15% in 2024.

The fundraising will drive innovation and product enhancement through advanced technology integration for better service offerings to tap the growing requirements of the sector, the company says.

“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 fortify the company's financial position, providing it with enhanced capabilities to pursue its ambitious growth plans and capitalize on emerging opportunities in the market,” it adds.

India's cement consumption is at just 242 kg per capita, as compared to the global average of 525 kg per capita, highlighting significant potential for the growth of the cement sector in India.