Ambuja Cements announced its acquisition of a 100% stake in Penna Cement Industries Ltd (PCIL) for Rs 10,422 crore. This strategic move aligns with Adani’s ambitious target to reach a cement production capacity of 140 million tonnes per annum (MTPA) by 2028.
The acquisition, detailed in a stock exchange filing, is expected to be completed within three to four months. Ambuja Cements will acquire the stake from the PCIL promoter group, led by P. Pratap Reddy and his family. The purchase will be fully funded through internal accruals.
Adani’s acquisition aims to capture 20% of the Indian cement market by FY28, leveraging the robust demand for building materials. “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,” Ambuja Cements stated.
In addition to this major acquisition, Ambuja Cements had previously signed an agreement in April to acquire a grinding unit in Tamil Nadu for Rs 413.75 crore, further strengthening its presence in the South Indian market.
PCIL’s strategic location and substantial limestone reserves, along with its bulk cement terminals (BCTs), offer significant logistical advantages, providing Ambuja access to eastern and southern India and potential entry to Sri Lanka via sea routes. PCIL currently boasts a total installed cement production capacity of 10 MTPA, spread across four integrated manufacturing facilities and two grinding units in Andhra Pradesh, Telangana, and Maharashtra. An additional 4 MTPA capacity is under construction in Krishnapatnam and Jodhpur, set to be completed within the next 6 to 12 months.
The acquisition also includes railway sidings for approximately 90% of the cement capacity, supported by captive power plants and waste heat recovery systems. The surplus clinker at the Jodhpur plant will enable an additional 3 MTPA cement grinding capacity, complementing the projected 14 MTPA. “The existing dealers of PCIL will integrate into Adani Cement’s market network, creating formidable synergy,” Ambuja stated.
This acquisition marks a significant milestone for Ambuja Cements, reinforcing its commitment to becoming a dominant force in the Indian cement industry while enhancing its strategic footprint in the rapidly growing South Indian market.