Adani-owned Ambuja Cements to buy majority stake in Sanghi Industries

Ten News Network

2nd August 2023: Adani Group-owned Ambuja Cements is planning to buy a majority stake in Sanghi Industries’ activities in order to increase its foothold in the cement business.

A report states that, deal’s official announcement is expected on Wednesday, according to Reuters, citing sources with direct knowledge. However, the precise stake percentage and transaction value are unknown at this time.

According to the report, the sale was sealed by valuing Sanghi at 60 billion rupees ($729 million). Earlier, The Economic Times stated that Adani was one of the frontrunners in the contest to acquire Sanghi.

Ambuja Cements Ltd is one of India’s biggest cement firms. Adani is India’s second largest cement producer, after only UltraTech Cement. It owns Ambuja and its subsidiary ACC Ltd, which have a capacity of more than 65 million tonnes and a dozen manufacturing sites spread across India.

Ambuja Cements announced a 31% year on year (YoY) increase in consolidated profit for the June 2023 quarter, totalling Rs 1,135 crore. In the previous fiscal year’s similar quarter, the net profit was Rs 865 crore.

Meanwhile, consolidated sales increased by 9% year on year to Rs 8,713 crore in Q1.

Ajay Kapur, Whole Time Director and CEO, Ambuja Cements states, “Along with the strong demand for our premium cement products, growth was fuelled 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.”

Sanghi, which dominates Gujarat, has a production capacity of 6.1 million metric tonnes per year. Earlier, an Adani Group representative told Reuters that cement was a significant priority area, with ambitions to explore various greenfield prospects.