Adani-backed Ambuja to acquire 46.8% stake in Orient Cement for Rs 8,100 cr

Adani family-owned Ambuja Cements has signed a binding agreement to acquire a 46.8 per cent stake in Orient Cement Ltd (OCL) with an investment of Rs 8,100 crore.

The acquisition of the CK Birla-owned company helps move towards the target capacity of 140 MTPA (Million Tonnes Per Annum) by 2030. With this, Ambuja has overtaken Ultratech, an Aditya Birla Group company, which was also in the race to buy the company.

Last year in December, the Adani Group acquired Sanghi Cement, and this year, it expanded its cement sector presence after acquiring Penna Cement for Rs 10,422 crore in June.

Ambuja will make an open offer at Rs 395.40 per equity share for the public shareholders of Orient Cement as per Sebi's (Securities and Exchange Board of India) SAST (Substantial Acquisition of Shares and Takeovers) Regulations.

Ambuja will acquire a 37.90 per cent stake from the promoters and another 8.90 per cent of the existing share capital upon completion under the Other SPA. It will also acquire 26 per cent of the expanded share capital pursuant to the open offer, assuming full acceptance in the offer.

Orient Cement has an existing capacity of 5.6 MTPA for clinker and 8.5 MTPA for cement, along with 95 MW CPP (Captive Power Plant), 10 MW WHRS (Waste Heat Recovery System), and 33 MW Renewable Energy across Telangana, Karnataka, and Maharashtra. This acquisition improves Adani Group’s market share in the cement industry by 2 per cent pan-India.

OCL has secured a concession from Madhya Pradesh Power Generating Company Ltd (MPPGCL) to set up a 2.0 MTPA Cement Grinding Unit (GU) within the premises of Satpura Thermal Power Station in Sarni, Madhya Pradesh.

OCL also holds a large high-quality limestone mining lease in Chittorgarh, Rajasthan, which provides the potential to set up an additional 6 MTPA capacity in North India.

The acquisition of OCL complements Ambuja’s existing cement footprint, reducing overall lead distances and logistics costs for the cement business, while improving market share in core markets.

Ambuja will fund the acquisition through internal accruals and will remain debt-free.

“This timely acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by around 30 MTPA within two years of Ambuja’s acquisition,” said Karan Adani, Director of Ambuja Cements. “By acquiring OCL, Ambuja is poised to reach 100 MTPA cement capacity in FY25. The acquisition will help expand Adani Cement’s presence in core markets and improve its pan-India market share by 2 per cent. OCL’s assets are highly efficient, equipped with railway sidings and well-supported by captive power plants, renewable energy, WHRS, and AFR (Alternative Fuel and Raw materials) facilities. OCL’s strategic locations, high-quality limestone reserves, and requisite statutory approvals present an opportunity to increase cement capacity in the near term to 16.6 MTPA.”

CK Birla, Chairman of Orient Cement and the CK Birla Group, said, “The CK Birla Group is continuously reallocating capital to sharpen its focus on consumer-centric, technology-driven, and service-based businesses. I take pride in Orient Cement’s impressive track record of building premium brands and maintaining a leading market share in the geographies it operates in. We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders.”

Amita Birla, Co-Chairman of the CK Birla Group, added, “Orient Cement has a strong market presence, with sustainability initiatives, particularly in renewable energy, being a significant part of its DNA. I am convinced that Ambuja Cements is the right home for all our colleagues at Orient Cement, as well as our customers.”

OCL has 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity, along with statutory clearance to increase clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA. In addition, OCL also holds a limestone mining lease in Chittorgarh for setting up an Integrated Unit (IU) with 4 MTPA clinker capacity and a split Grinding Unit (GU) of 6 MTPA in North India.

The company has also secured a concession from MPPGCL in Madhya Pradesh for setting up a Grinding Unit within the premises of Satpura Thermal Power Plant. Both these developments complement the Adani Group’s existing cement footprint.

OCL has recently commissioned a WHRS in its Chittapur IU and is in the final stages of commissioning 16 MW of solar power in Chittapur and 3.7 MW of solar power in Jalgaon. OCL’s efficient plants, motivated teams, strong balance sheet, and well-distributed dealer network will be excellent additions to the Adani Group’s existing cement business. OCL’s existing dealers will integrate into Adani Cement’s market network, creating significant synergies.

Ambuja plans to optimise OCL’s overall capacity utilisation to enhance its cost-competitiveness and improve operating performance, while leveraging the synergies inherent in the existing cement business.