Shares of ACC and Ambuja Cements, the recently acquired cement entities of Adani Group, rose nearly 4% in early trade on Tuesday after the cement makers announced that they will resume operations at two plants in Himachal Pradesh from today. Both the companies suspended operations at the Gagal and Darlaghat plants in Himachal Pradesh in December last year due to rise in transportation cost. The cement majors were in discussion with transport unions to bring down the freight rates as they transport both raw material and finished goods.
“We are happy to inform that all the stakeholders have come together and amicably resolved the ongoing discussions on the freight rates in the state of Himachal Pradesh. This outcome is positive for ACC & Ambuja Cements and all the stakeholders involved. In line with our commitments, we are pleased to share that ACC and Ambuja Cements will resume operations effective tomorrow at the Gagal and Darlaghat plants in Himachal Pradesh,” says spokesperson of Adani Cements.
As per the release, the new freight rates from today for single axle trucks of 12 tonne would be ₹10.30 per tonne per km for Ambuja Cements’ Darlaghat plant and ACC’s Gagal plant as compared to earlier rates of ₹11.41 for ACC’s Gagal and ₹10.58 for Ambuja Cements’ Darlaghat units. The new rates for multi-axle 24 tonnes trucks would be ₹9.30 per tonne per km for both units. This will result in an overall reduction of 10-12% in the freight rates benefiting the customers of Himachal Pradesh, the release noted.
The release stated that the Gagal and Darlaghat units of ACC and Ambuja Cements are one of the largest industrial units in the state and play a vital role in providing employment and contributing to the economic viability of the state. “The reopening of plants will help in the economic, social, and overall development of the State. We are grateful to the Hon’ble Chief Minister of Himachal Pradesh, the members of the Sub-Committee, Government Ministries of Himachal Pradesh and the Transport Unions taking this initiative in the overall interest of all stakeholders and the State of Himachal Pradesh,” Adani Cements said.
The freight rates are as per the guidance provided by the relevant government authorities, it added.
Reacting to the news, Ambuja Cements shares opened a tad lower at ₹353 against the previous closing price of ₹353.30 on the BSE, but soon gained momentum and rose as much as 3.76% to ₹366.60 in the first hour of trade so far.
Similarly, ACC share price climbed 0.9% to ₹1,867 against the previous closing price of ₹1,850.75 on the BSE. The cement heavyweight opened at ₹1,863.60 and it touched a low of ₹1,847 in the first hour of trade so far.
In comparison, the BSE Sensex was trading marginally higher by 44 points at 60,735 levels, tracking muted cues from global peers. The top gainers of the BSE Sensex pack were NTPC, Tata Steel, Hindustan Unilever, UltraTech Cement, and Larsen & Toubro.
ACC shares have lost 20% in market value, while Ambuja Cements has shed 27% since the release of the Hindenburg report on January 24, 2023. Among the nine listed group entities, these two companies have seen the least correction after the management refuted Hindenberg Research report claims that shares of both cement entities were pledged by promoters as a part of the acquisition financing. “We would like to clarify that none of the shares of Ambuja or ACC have been pledged by Promoters. The Promoters have only provided non-disposal undertaking and accordingly, there is no requirement of providing any top-up of shares of Ambuja and ACC or cash top up under the acquisition financing raised last year,” Adani group had said in a statement earlier this month.
In May last year, billionaire Gautam Adani-led Adani family had entered into definitive agreements with Switzerland-based Holcim to buy its entire stake in ACC and Ambuja Cements for around $10.5 billion, making this the largest ever acquisition by Adani, and India’s largest ever M&A transaction in the infrastructure and materials space.