The Adani Group is actively pursuing the acquisition of several prominent cement companies in India, including Penna Cement based in Hyderabad, Saurashtra Cement headquartered in Gujarat, the cement division of Jaiprakash Associates, and Vadraj Cement owned by ABG Shipyard. This strategic move, reported by the Economic Times, is part of Adani’s ambitious plan to expand its cement production capacity significantly.
According to sources, the Adani Group has allocated $3 billion for these acquisitions, aiming to surpass Aditya Birla Group’s UltraTech and become India’s largest cement manufacturer within the next three to four years. The group’s interest in these companies is driven by anticipated growth in demand fueled by India’s ongoing infrastructure development initiatives and increased capital expenditure.
While Adani declined to comment on the Economic Times report, neither Penna Cement nor Saurashtra Cement responded to inquiries. The resolution professional for Vadraj Cement and the secretarial department of JP Associates also did not provide comments at the time of press.
Penna Cement, with an estimated value of approximately Rs 9,000 crore, is poised for potential valuation growth as it expands its production capacity from 10 MTPA to 15.5 MTPA. Meanwhile, Saurashtra Cement currently holds a market capitalization of Rs 1,487 crore.
Adani Group is reportedly prepared to offer an enterprise value (EV) ranging from $85 to $120 per ton for these mid-sized cement businesses, with considerations for premium pricing based on capacity expansion potential, limestone resources, and packing terminals. Last year, Adani acquired Sanghi Cement at an EV of $100 per ton, demonstrating its strategic focus on expanding market presence through acquisitions.
Jaiprakash Associates and Vadraj Cement, currently undergoing bankruptcy proceedings, possess significant cement production capacities of 9.5 MTPA and 6 MTPA, respectively.
Ambuja Cement, with substantial cash reserves of Rs 24,338 crore and no debt, appears to be the preferred financial vehicle for Adani’s acquisition strategy. Adani may also explore synergies with ACC, particularly in southern India, where the group aims to enhance its market share.
