Adani Group pledges entire stake in ACC, Ambuja for $13 bn; stocks fall 5%

Shares of Ambuja Cements and ACC tumbled nearly 5% in early trade on Wednesday after billionaire Gautam Adani-led Adani Group pledged its entire stake in the two listed cement companies. The value of the pledged shares are worth around $13 billion (or ₹1 lakh crore) as per Tuesday’s closing price of the two counters, which is the highest in the history of capital market.

As per the exchange data, the conglomerate has pledged about 57% of ACC shares and 63% of Ambuja Cements with Deutsche Bank AG’s Hong Kong branch as collateral for loans taken by the group. The shares have been pledged through Endeavour Trade and Investment and Xcent Trade and Investment, the entities linked to Adani Group. Endeavour Trade and Investment and Xcent Trade and Investment are Mauritius-incorporated acquisition vehicles of the Adani family.

Reacting to the news, shares of Ambuja Cements declined as much as 4.87% to ₹546.1 in the first hour of trade so far. The share price of cement major has risen more than 100% in the past six months, from its 52-week low of ₹274 touched on March 8, 2022. 

Similarly, ACC shares dropSimilarly, ACC shares dropped 4.5% to touch low of ₹2,603.85, against the previous closing price of ₹2,725.7 on the BSE. Last week, the large cap stock touched its 52-week high of ₹2,784.95 on September 14, while it hit a 52-week low of ₹1,900.50 on March 7, 2022.

Currently, Adani Group holds 63.15% in Ambuja Cements and 56.69% in ACC (of which 50.05% is held through Ambuja Cements). The combined market capitalisation of Ambuja Cements and ACC is nearly ₹1.60 lakh crore as on date.

The development came days after Adani Group concluded the acquisition of Ambuja Cements and ACC with a total payout of $6.8 billion through purchase of Holcim’s stake and open offer. Besides, Adani Group also announced an equity infusion of ₹20,000 crore in Ambuja via warrants at a price of ₹418.87 per share. This would increase promoter stake to 70.6% on complete vesting.

Last month, the Adani family launched its ₹31,000 crore open offer to acquire 26% additional stake in two listed cement units. As per the open offer filed with exchanges, the Adani 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 Cements for ₹19,879.57 crore. The open offer, which closed on Friday, received a lacklustre response from public shareholders.

The open offer was triggered after the Adani family in May this year signed a deal to acquire Holcim’s entire stake in ACC and Ambuja Cements for around $10.5 billion. Holcim, through its subsidiaries, owned 63.19% in Ambuja Cements and 54.53% in ACC - of which 50.05% were held through Ambuja Cements. The transaction was financed by facilities aggregating to $4.50 billion availed from 14 international banks.

Post acquisition, a new board has been inducted at both companies, with Gautam Adani taking over as the chairman of Ambuja Cements  and his elder son, Karan Adani, as chairman and non-executive director of ACC. Ajay Kapoor, erstwhile CEO of Ambuja, has been appointed as the CEO of the company. Besides, a common CFO, Vinod Bahety, has been appointed for both companies.