Adani Group’s Ambuja Cements acquires Sanghi Industries at an enterprise value of ₹5,000 crore

• Ambuja will acquire 56.74% shares of SIL from its existing promoter group, Ravi Sanghi & family.
• The acquisition will be fully funded through internal accruals.
• With this acquisition, the group is well on course to achieve its target of 140 MTPA of cement manufacturing capacity by 2028 ahead of time, says Gautam Adani.
  

After a long pause due to the Hindenburg effect, the Adani Group is back on its expansion path via an inorganic route. The group owned Ambuja Cements said on Thursday that it acquired Sanghi Industries (SIL) at an enterprise value of ₹5,000 crore.

Ambuja will acquire 56.74% shares of SIL from its existing promoter group, Ravi Sanghi & family. The acquisition will be fully funded through internal accruals.

“With this acquisition, the Adani group is well on course to achieve its target of 140 MTPA of cement manufacturing capacity by 2028 ahead of time. 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,” Gautam Adani, chairman of the Adani Group.

SIL’s integrated manufacturing unit at Sanghipuram in Gujarat’s Kutch district is India’s largest single-location cement and clinker unit by capacity. Ambuja said that it aims to make SIL the lowest cost producer of clinker in the country.

With 2,700 hectares of land, SIL’s integrated unit has two kilns with a clinker production capacity of 6.6 MTPA and a cement grinding unit with a capacity of 6.1 MTPA. It has a captive power plant of 130 MW, and is connected with a captive jetty at Sanghipuram.

“We will also invest in deeping the captive port capacity,” said Karan Adani, director of Ambuja Cements.

Adani said that with SIL’s limestone reserves of a billion tonnes, Ambuja will increase cement capacity at Sanghipuram to 15 MTPA in the next two years. Ambuja will also invest in expanding the captive port at Sanghipuram to handle larger vessels.

“We are optimistic about the acquisition by Ambuja Cements, recognising it as a mutually beneficial opportunity for both the shareholders. This strategic collaboration stands to propel growth and innovation, creating a formidable force in the cement industry, and enhancing value for all stakeholders involved,” said Ravi Sanghi, CMD of Sanghi Industries.

The acquisition will help ACL to strengthen its market leadership and increase its cement capacity to 73.6 MTPA from the current 67.5 MTPA. With the ongoing capex of 14 MTPA and with commissioning of 5.5 MTPA capacity at Dahej and Ametha by second quarter of FY24, the Adani group’s capacity will be 101 MTPA by 2025.

SIL also has a bulk cement terminal each at Navlakhi Port in Gujarat and Dharamtar Port in Maharashtra. Most of the cement is transported through the sea route, which is environment-friendly and cost competitive. It also has a network of 850 dealers, with market presence in Gujarat, Madhya Pradesh, Rajasthan, Maharashtra and Kerala.