Ambuja Cements has announced plans to repay ₹3,000 crore of debt for Penna Cement Industries Ltd (PCIL) as part of its acquisition strategy. This repayment is set to take place within 3-4 months, once the acquisition deal is finalized.
The acquisition of PCIL, valued at ₹10,422 crore, was revealed earlier this week, marking a significant move for Ambuja Cements as it seeks to bolster its market presence and production capabilities. The deal will be fully funded through internal accruals, showcasing the financial strength and strategic vision of the Adani Group.
Ambuja Cements’ Managing Director, Ajay Kapur, stated, “This acquisition aligns with our long-term strategy to enhance production capacity and expand our footprint in key markets. Repaying Penna Cement’s debt not only strengthens our balance sheet but also positions us to further invest in growth and innovation.”
The acquisition will bring Ambuja Cements an additional 14 million tonnes per annum (MTPA) capacity from PCIL’s existing facilities. On top of this, Ambuja plans to enhance capacity by an additional 3 MTPA, underscoring its commitment to meeting the growing demand for cement in India.
This strategic move will enable Ambuja Cements to leverage PCIL’s strategic locations, sufficient limestone reserves, and bulk cement terminals (BCTs), providing access to key markets in southern and eastern India, as well as potential entry into Sri Lanka via sea routes. The integration of PCIL’s assets is expected to yield substantial synergies, driving operational efficiencies and market expansion.
In addition to the capacity enhancements, the acquisition will support Ambuja Cements’ goal of capturing a 20 percent market share by FY28, amidst robust demand for building materials in the country. The company recently signed another agreement to acquire a grinding unit in Tamil Nadu for ₹413.75 crore, further solidifying its presence in South India.
Penna Cement’s current production capacity stands at 10 MTPA, with facilities spread across Andhra Pradesh, Telangana, and Maharashtra. Additional capacity of 4 MTPA is under construction and is expected to be operational within the next 6 to 12 months. The majority of these facilities are supported by railway sidings and captive power plants, which will contribute to cost-effective and efficient operations.
With this acquisition, Ambuja Cements is poised to capitalize on Penna Cement’s robust infrastructure and strategic market position. The deal signifies Ambuja’s aggressive expansion strategy and its dedication to becoming a leading player in the Indian cement industry.
Ambuja Cements, part of the Adani Group, is one of India’s leading cement manufacturers. With a strong focus on sustainable development, the company operates state-of-the-art production facilities across the country, delivering high-quality cement to meet the diverse needs of the construction industry. Ambuja Cements is committed to driving innovation, enhancing operational efficiencies, and contributing to the nation’s infrastructure development.
