 "Ambuja Cements acquires Penna Cement at enterprise value of Rs 10,422 cr")
Adani Group-owned Ambuja Cements on Thursday acquired Penna Cement at an enterprise value of Rs 10,422 crore, the company said in a BSE filing.
Ambuja Cements, a part of the diversified Adani Group, today announced the signing of a binding agreement for the acquisition of Penna Cement Industries Ltd (PCIL).
Ambuja will acquire 100 per cent shares of PCIL from its existing promoter group, P Pratap Reddy and family. The acquisition will be fully funded through internal accruals.
“This landmark acquisition is a significant step forward in Ambuja Cements’ accelerating growth journey,” said Ajay Kapur, chief executive officer (CEO) and whole-time director of Ambuja Cements.
By acquiring PCIL, Ambuja is poised to expand its market presence in south India and reinforce its position as a pan-India leader in the cement industry.
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PCIL’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment.
“Importantly, the bulk cement terminals (BCTs) will prove to be a game-changer by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route. Our aim is to make PCIL highly competitive on cost and productivity and improve its operating performance,” Kapur said.
PCIL has 14 million tonnes per annum (MTPA) cement capacity, of which 10 MTPA is operational, and the remaining is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and will be completed within 6 to 12 months.
Around 90 per cent of the cement capacity comes with railway sidings, and some are supported by captive power plants and waste heat recovery systems. Further, surplus clinker at the Jodhpur plant will support an additional 3 MTPA cement grinding capacity over and above 14 MTPA.
The existing dealers of PCIL will move to Adani Cement’s market network to bring in formidable synergy.