Adani Group aims to capture 20% share in Indian cement market by FY28

Cement to green power conglomerate Adani group, which owns Ambuja Cements and ACC Ltd, wants to capture around 20 per cent of the Indian cement market by FY28. An investor presentation shared by Ambuja Cements showed that Adani Cement business is planning to implement its accelerated capex program through internal accruals and the business will continue to "remain debt free."

Besides, Adani Cement also amplifies the pace of capacity expansion and is expected to have an accelerated growth rate of 16 per cent to reach 140 MTPA (million tonnes per annum) by FY2028. "Adani Cement market share targeted to be 20 per cent by FY’28 from current 14 per cent," said the Adani group firm.

Adani Group acquired Ambuja Cements and its subsidiary ACC Ltd from Switzerland’s Holcim Group for $6.4 billion in 2022. A $4.5 billion debt obligation arose out of the bridge loan that was secured by the Adani Group from a consortium of 14 banks to acquire the two cement companies.

At present, Adani Cement is the second leading company in the sector after the Aditya Birla group firm UltraTech Cements.

Ambuja, with its subsidiaries ACC Ltd, has the capacity to produce 77.4 million tonnes of cement annually from 18 integrated cement manufacturing plants and 18 cement grinding units across the country. It had recently acquired Sanghi Industries Ltd.

The group has certain enablers for capacity enhancement and it already has land in possession and some are in the advanced stages of acquisition.
It has a cumulative 8,000 million metric tonnes of limestone reserve, a major raw material for the cement industry, " in possession at nil to nominal premium," Adani Cements said.

Moreover, it has 40 per cent of Fly Ash requirements under the long-term arrangement, which will increase to over 50 per cent by 2028.
Ambuja further stated it has "better enterprise risk management" and 65 per cent of the total cost of cement has synergies with a group or where the Group is the market leader.

"Accelerated Growth and Cost Leadership supported by Group Synergies is one of the most important differentiating points for Adani Cement," it said.
In addition to that Ambuja continues to remain debt-free with a net worth of Rs 43,000 crore (around USD 5.2 billion), and cash and cash equivalents of Rs 8,591 crore (USD 1.04 billion) as of December 2023.

Over the Indian cement industry, Adani Group said it is also expected to grow at a CAGR of 7 to 8 per cent, it said.
"Growth will further compound given the opportunities in the Building Materials Industry," it said.
India is currently the second largest producer of cement with an installed capacity of 550 million tonnes, having 8 per cent of the total global capacity of 6,875 million tonnes.
Next 5 years, demand expected to grow at a rate of 8 - 9 per cent, higher than capacity addition rate, expect better capacity utilisation, it said.

Shares of Ambuja Cements closed at Rs 609.65, down by 2.54%. While shares of ACC Ltd closed at Rs 2,467.85, down by 2.26%.

(With PTI inputs)