Ambuja Cement aims to increase its cement production capacity to 100 million tonnes per annum (MTPA) by FY25, with the acquisition adding about 30 MTPA to its total
In Short
- Ambuja Cement to acquire 46.8% stake in Orient Cement
- Acquisition to add 30 MTPA to Ambuja’s capacity
- Deal subject to approvals including CCI, Sebi clearance
Ambuja Cement, part of the Adani Group, has signed a definitive agreement to acquire a 46.8% stake in Orient Cement Ltd (OCL) from the CK Birla Group. The acquisition is valued at Rs 8,100 crore, with Orient Cement shares priced at Rs 395.4 each. This move is seen as a strategic step for Ambuja Cement to expand its capacity and market share across India.
The deal involves Ambuja Cement taking over the CK Birla Group’s entire shareholding in Orient Cement. Ambuja Cement aims to increase its cement production capacity to 100 million tonnes per annum (MTPA) by FY25, with the acquisition adding about 30 MTPA to its total. The transaction will be fully funded through Ambuja’s internal resources.
Following the announcement, shares of Orient Cement dropped by 1.77% to Rs 346.20, while Ambuja Cement shares were down 1.31%, trading at Rs 564.40 as of 12:30 PM on Tuesday. Despite the slight dip in stock prices, market analysts view this acquisition as a significant move for Ambuja’s growth strategy.
Karan Adani, Director of Ambuja Cement, described the acquisition as an important step in the company’s growth journey. He said, “This acquisition increases our cement capacity by 30 MTPA and brings us closer to achieving our target of 100 MTPA by FY25. Orient Cement’s assets are efficient and strategically located, which will help us improve our market share across key regions in India by 2%
Karan Adani, Director of Ambuja Cement, described the acquisition as an important step in the company’s growth journey. He said, “This acquisition increases our cement capacity by 30 MTPA and brings us closer to achieving our target of 100 MTPA by FY25. Orient Cement’s assets are efficient and strategically located, which will help us improve our market share across key regions in India by 2%
Orient Cement is known for its efficient operations, including well-equipped railway sidings, captive power plants, and renewable energy facilities. These assets will enhance Ambuja’s overall infrastructure, making the company more competitive in the Indian cement market.
The CK Birla Group is a well-established Indian multinational conglomerate with over 150 years of experience. The decision to sell its stake in Orient Cement aligns with its strategy to focus on consumer-centric, technology-driven, and service-based businesses.
CK Birla, Chairman of Orient Cement and the CK Birla Group, said, “We are proud of Orient Cement’s track record and are confident that the Adani Group will drive its continued growth. The sale allows us to reallocate capital and sharpen our focus on other business areas.”
Amita Birla, Co-Chairman of the CK Birla Group, also expressed confidence in the deal, stating, “Orient Cement has always prioritised sustainability, particularly in renewable energy. I believe Ambuja Cement is the right partner to continue this journey and ensure growth for our colleagues and customers.”
With the acquisition, Ambuja Cement will gain access to Orient Cement’s high-quality limestone reserves and strategically located plants. The deal also presents opportunities for further expansion, with Orient Cement’s current capacity of 16.6 MTPA expected to grow in the near future
Karan Adani noted that Orient Cement’s assets are equipped with advanced technology, such as waste heat recovery systems (WHRS) and alternative fuel and raw material (AFR) facilities. These features, along with the company’s existing infrastructure, will strengthen Ambuja’s ability to meet growing demand in the cement market.
The acquisition is still subject to regulatory approvals, including clearance from the Competition Commission of India (CCI) and a mandatory open offer under Sebi regulations.
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