In order to strengthen its presence in the cement industry, Adani Group-owned Ambuja Cements is all set to acquire a majority stake in operations of Sanghi Industries, according to a report.
The official announcement regarding the deal is likely to be made on Wednesday, Reuters reported citing sources with direct knowledge. However, the exact stake percentage and transaction amount is not known as of now.
According to the report, the deal was locked by considering Sanghi's enterprise value at 60 billion rupees ($729 million). Earlier, The Economic Times had reported that Adani was among the frontrunner in the race to acquire Sanghi, which was being apprised at that enterprise value.
Ambuja Cements Ltd is among the leading cement companies in India. It may be noted that Adani is India's second largest cement producer, behind UltraTech Cement. It owns Ambuja and its subsidiary ACC Ltd, which have a capacity to produce more than 65 million tonnes with more than a dozen manufacturing plants across India.
Ambuja Cements reported a 31 per cent year-on-year (YoY) jump in consolidated profit for the June 2023 quarter at Rs 1,135 crore. The net profit stood at Rs 865 crore in the corresponding quarter of the previous financial year.
Meanwhile, the consolidated revenue rose 9 per cent YoY to Rs 8,713 crore in Q1.
"Along with the strong demand for our premium cement products, growth was fueled by our various competences in operational excellence, supply chain management, and sales & marketing excellence. Our synergies with the Adani Group companies are lowering input costs, which is boosting EBITDA growth," Ajay Kapur, Whole Time Director and CEO, Ambuja Cements said.
Enjoying its dominance in Gujarat, Sanghi has a production capacity of 6.1 million metric tonnes per annum. A spokesperson for the Adani Group told Reuters earlier that cement was a key focus area and there were plans to explore multiple greenfield opportunities.
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