Ambuja Cements, a prominent company within the Adani Group, has announced its acquisition of Penna Cement Industries Ltd (PCIL), marking a significant move in its expansion strategy. The acquisition, valued at Rs 10,422 crore, involves obtaining a 100% stake from PCIL's promoter group, the P. Pratap Reddy family based in Hyderabad. Ambuja Cements intends to bolster its total capacity to 140 million tonnes per annum (MTPA) by 2028 through this strategic investment.
Funded internally, the acquisition is anticipated to increase Adani Cement's market share by 2% nationwide and by 8% specifically in south India. Ajay Kapur, CEO and Whole Time Director of Ambuja Cement, expressed that this acquisition marks a milestone in their growth trajectory, positioning Ambuja as a leading player across India's cement industry.
PCIL currently operates with a cement capacity of 14 MTPA, of which 10 MTPA is operational. Additional capacities are under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA), expected to be completed within the next 6 to 12 months. The strategic location and ample limestone reserves of PCIL present opportunities for further capacity expansion through debottlenecking and additional investments.
Kapur highlighted the strategic importance of PCIL's bulk cement terminals (BCTs), which will facilitate access to eastern and southern regions of peninsular India, as well as potentially enabling exports to Sri Lanka via sea routes. The integration of PCIL's existing dealers into Adani Cement's network is expected to generate synergies that enhance market penetration and operational efficiencies.
In the fiscal year 2024, the Adani Group achieved notable growth through acquisitions, including Sanghi, Asian Cements, and GU in Tuticorin, thereby increasing its cement capacity by 11.4 MTPA to reach a total of 78.9 MTPA. Meanwhile, Ambuja Cements reported robust financial performance for FY24, with a profit after tax (PAT) of Rs 4,738 crore, marking a remarkable 119% increase year-on-year, and an operating EBITDA of Rs 6,400 crore, up by 73%.
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