India Cements has sold its entire stake in Springway Mining Private Ltd to JSW Cement for ₹477 crore while Adani Group-owned Ambuja Cements is closing in to buy Jaypee Group's cement assets for about ₹5,000 crore.

SMPL owns limestone bearing land in Panna district of Madhya Pradesh and is in the process of setting up of a cement plant in the state, says India Cements, adding it has received a consideration of ₹374 crore on Monday and the remaining ₹103 crore will be released upon completion of certain conditions of the share purchase agreement.

The consolidation in the country's cement sector comes months after the Adani family forayed into the cement industry by buying out Holcim's stake in Ambuja Cements and ACC. 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 Gautam Adani-led conglomerate, which is now the second largest cement maker in India, is likely to announce the acquisition of Jaypee Group's cement assets. The board of directors of Jaiprakash Power Ventures on Monday decided to divest the company's Nigrie cement grinding unit as well as other non-core assets.

Shareholders of Ambuja Cements approved all proposals at its extraordinary general meeting, including raising ₹20,000 crore from an Adani Group entity.

Meanwhile, operating profitability of cement makers will decline around 15% year-on-year to ₹900-925 per tonne in the financial year 2022-23,  as increase in realisations will not be enough to offset the increase in prices of coal, petcoke and diesel that has pushed the average cost of production higher, according to CRISIL.

However, the 17% growth in cement demand during the first quarter of the fiscal, albeit on the low base of the previous fiscal (which was hit by the second wave of Covid-19), offers a silver lining, the rating agency said last month.

Though growth may taper in subsequent quarters, and print at 8-10% for the full fiscal, it would still be the highest since fiscal 2019.

The higher demand will mitigate the impact of lower profitability on absolute operating profits and cash accruals of cement makers, cushioning their credit profiles.

"Cement volume growth this fiscal will be driven by non-housing segments, wherein offtake is expected to rise more than 15%. Demand from the infrastructure segment will be aided by government spend, while industrial/ commercial demand will be driven by growing investment in data centres and warehousing, and the low base of the previous fiscal," said Koustav Mazumdar, associate director, CRISIL Research.

Offtake from the housing segment is expected to grow around 5%, taking overall cement volume growth to 8-10%, Mazumdar added.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.