Dalmia Bharat to acquire cement assets of Jaypee Group at an enterprise value of Rs 5,666 crore

Dalmia Bharat's cement arm will buy Jaiprakash Associates' cement and power businesses for Rs 5,666 crore, including debt, in a bid to expand its footprint and capacity, according to regulatory filings filed by them on Monday.

The deal comes amid cut-throat competition in the Indian cement industry. In June, market leader UltraTech Cement unveiled a plan to boost its annual capacity to fend off competition from Adani Group. Adani bought Ambuja Cements and ACC in May from Switzerland’s Holcim to become India’s second-largest cement maker.

The deal includes cement capacity of 9.4 million tonnes in Madhya Pradesh, Uttar Pradesh and Chhattisgarh, clinker capacity of 6.7 million tonnes (MT) and thermal power plants of 280 MW. Dalmia said the deal was a significant step towards reaching 110 MT to 130 MT capacity by fiscal year 2031, with its capacity currently pegged at 37 MT.

The deal will also help Jaiprakash Associates to reduce its debt.

“In order to repay the loans of lenders and concentrate in its other core areas of working, JAL has decided to divest from (the) cement business completely,” JAL Executive Chairman Manoj Gaur said.

JAL had earlier divested over 20 million tonnes per annum (MTPA) cement capacity to UltraTech cement between 2014 and 2017, and handed over its controlling stake of more than 2 MTPA to Dalmia Group in 2015.