Adani-owned Ambuja to buy majority stake in Sanghi for Rs 5,000 cr

The deal by Ambuja is likely to be announced as soon as Wednesday, the sources said.

Ambuja Cements Ltd (ACL), now a subsidiary of Adani Group, on Thursday, announced the acquisition of a majority stake in Sanghi Industries Ltd (SIL) in a deal worth Rs 5,000 crore.

ACL will acquire 56.74 per cent shares of SIL from its existing promoter group, Ravi Sanghi & family. The acquisition will be fully funded through internal accruals, as per an official statement.

“This landmark acquisition is a significant step forward in Ambuja Cements’ accelerating growth journey,” Gautam Adani, Chairman of the Adani Group, said.

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“By joining hands with SIL, Ambuja is poised to expand its market presence, strengthen its product portfolio, and reinforce its position as a leader in the construction materials sector,” he added.

This will be be the third major acquisition of the Adani group in the cement sector after its acquisition of Ambuja and ACC Cements back in 2022.

Ambuja said in the statement that expects the acquisition of Sanghi to boost its aggregate cement production capacity by 9 per cent to 73.6 million tonne per annum. Apart from capacity expansion, the group also announced its intent to expand the captive port at Sanghipuram to accommodate larger vessel sizes of 8,000 deadweight tonnage (DWT).

The deal will also provide Ambuja access to Sanghi's limestone reserve of nearly a billion tonne along with its network of 850 dealers and its market presence in Gujarat, Madhya Pradesh, Rajasthan, Maharashtra, and Kerala.

“In the next two years, Ambuja Cements will increase the cement production capacity at Sanghipuram to 15 million tonne per annum. Our vision is to produce the lowest cost clinker and then transport it through coastal routes to the markets of Saurashtra, South Gujarat, Mumbai and Mumbai Metropolitan Region, Karnataka and Kerala," said Karan Adani, chief executive officer of Adani Ports and Special Economic Zone Limited in a video address on Thursday. "With the right implementation, we are confident that we will emerge as the lowest-cost suppliers of cement in all of these markets," he added.

According to a stock exchange filing, the acquisition will be completed in the next three to four months.

With the ongoing capex of 14 metric tonnes per annum (MTPA) and with the commissioning of 5.5 MTPA capacity at Dahej and Ametha by Q2 of FY24, the Adani Group’s capacity will be 101 MTPA by 2025, the company said in a press statement.

Shares of Sanghi Industries jumped 5 per cent after the cement maker’s announcement, to touch its upper circuit of Rs 105.76 on the BSE, closing at Rs 105.76. Ambuja Cements’ shares, on the other hand, went up by nearly 4 per cent to hit a intra-day high of Rs 477 and closed at Rs 474.20.