Ambuja Cements raises ₹500 crore via warrants to Adani family; share gains 2%

Ambuja Cements, now a part of Adani Group, has raised ₹500 crore by issuing 47.74 crore warrants to the Adani family firm Harmonia Trade and Investment. The cement major has allotted warrants, convertible into an equivalent number of equity shares, of the face value of ₹2 each at a price band of ₹418.87. The paid-up value of warrants is ₹104.72 per share, which is a minimum of 25% of the issued price.

Following the announcement, shares of Ambuja Cements gained as much as 2.2% to ₹519.1 apiece on the BSE, against the previous closing price of ₹507.5. The cement stock has risen more than 50% in the last seven months, from its 52-week low of ₹274 touched on March 3, 2022. The counter hit a 52-week high of ₹585.45 on September 20, 2022.

"We would like to inform you that, the Finance Committee of Directors of the company, at its meeting held today (October 18) approved allotment of the warrants of the company by way of the private placement on a preferential issue basis to Harmonia Trade and Investment," Ambuja Cements said in an exchange filing on Tuesday.

As per the company, each warrant would be convertible into one equity share and the rights attached to warrants can be exercised at any time, within a period of 18 months from the date of allotment. The equity shares issued upon conversion of the warrants will be listed on the domestic bourses – the BSE and the NSE.

In an Extraordinary General Meeting (EGM) on October 8, shareholders of Amb­uja Cements approved the proposal to raise ₹20,000 crore from the Adani family firm by issuing warrants and the appointment of Gautam Adani and his son Karan Adani, among others on the board of the company.

After their acquisition in May 2022 by the Adani group, a new board was inducted at both Ambuja Cement Ltd and ACC Ltd, with Gautam Adani taking over as the chairman of Ambuja Cement and his elder son, Karan Adani, as chairman and non-executive director of ACC. Ajay Kapoor, the erstwhile CEO of Ambuja, was appointed as the CEO.

Last month, Adani Group had announced an equity infusion of ₹20,000 crore in Ambuja via warrants at a price of ₹418.87 per share, increasing the promoter stake to 70.6%. In August 2022, the Adani family also launched a ₹31,000 crore open offer to acquire a 26% additional stake in both Ambuja and ACC. The group acquired around 4.89 crore equity shares of ACC from public shareholders for ₹11,259.97 crore and 51.63 crore equity shares of Ambuja Cement for ₹19,879.57 crore.