Adani Enterprises denies plans of buying Jaypee Group's cement biz

Adani Enterprises on Friday clarified that it was not evaluating plans to acquire Jaiprakash Associates' cement business. Earlier this week, a media report quoting sources suggested that the Adani group was in advanced talks to buy Jaypee Group's cement assets. 

Following the development, shares of Jaiprakash Associates plunged 7.29 per cent to settle at Rs 10.56 on BSE. Adani Enterprises, on the other hand, declined 0.79 per cent to close at Rs 3,208.

"The company is not evaluating any such proposal and hence we are not in a position to comment on the veracity of said media report," the Adani group company said in an exchange filing. 

"In the event there is any development that requires disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we will responsibly disclose the same in accordance with the regulatory requirements," Adani Enterprises said.

Adani Group recently acquired Holcim’s entire stakes in Ambuja Cements and ACC, which was the largest ever acquisition in India’s infra and materials space. The acquisition was valued at $10.5 billion.

The group plans to double its cement capacity over the next five years. It aims to become the largest domestic cement player by 2030, it noted.

Nuvama Institutional Equities in an October 13 note said Jaypee currently owns 10.55 mtpa of operational capacity and Jaiprakash Associates directly controls 5.15 mtpa based in central India and the balance 5.4 mtpa is with its subsidiaries and associate entities. 

The brokerage has a cautious view on the cement sector, given the industry’s weak pricing power; the recent 15 per cent uptick in cost of domestic petcoke that challenges the hypothesis of massive cost reduction; and medium-term uncertainty owing to Adani Group’s entry.