Ambuja Cements Finalizes Sanghi Industries Acquisition for ₹5,000 Cr

Ambuja Cements has acquired Sanghi Industries Limited (SIL), marking a development in the cement industry. The Gautam Adani-led company's stocks, including Ambuja Cement and Sanghi Industries, have witnessed a surge for the second consecutive day, reflecting investor optimism.

Ambuja Cements, a major player in the cement sector, purchased a controlling 51.68% stake in Sanghi Industries through open market transactions. The transaction was completed with an enterprise value of ₹5,000 crore. Ambuja Cements acquired 13,34,95,941 equity shares at an average price of ₹121.9 per share, establishing a foothold in one of the country's largest single-location cement and clinker units.

Post-acquisition, Adani’s Cements stocks increased, with Ambuja Cement trading at ₹522.50 up 2% from the last close, and Sanghi Industries at ₹135.70, up 5% from the last close. The deal, priced higher than the earlier approved rate of ₹114.22 per share, emphasizes the market's positive response.

Adani Group's Cement Portfolio

Sanghi Industries' cement factory in Gujarat's Kutch region, recognized as the country's largest single-location cement and clinker unit, includes a captive jetty and a power plant. This strategic addition enables Ambuja to efficiently transport cement to coastal areas in Maharashtra, Karnataka, and Kerala, enhancing its regional market presence.

The acquisition of Sanghi Industries is the first move by the Adani group in the cement sector since its acquisition of Ambuja and ACC for $10.5 billion in June last year. This expansion reinforces the Adani group's commitment to diversifying its portfolio.

Analyst Views

Following the acquisition, Ambuja Cements' stock increased 6.26%, trading at ₹522 on the NSE. Brokerage firms hold divergent views on the stock, with Jefferies and Citi maintaining 'Buy' ratings and target prices of ₹540 and ₹500, respectively. However, Morgan Stanley adopts an 'equal-weight' stance with a target price of ₹390 apiece.

The acquisition not only positions Ambuja as a major player with a capacity of 74.6 million tonnes per annum (mtpa) but also presents immediate de-bottlenecking opportunities of 1.5 mtpa. Ambuja Cements aims to further enhance its capacity to approximately 100-110 mtpa by FY26/FY27.

Final Words

The Ambuja Cements and Sanghi Industries acquisition not only strengthens Ambuja's market position but also aligns with its long-term capacity expansion goals. Investors and analysts closely monitor the company's performance amid expectations of operational growth in the coming fiscal years. In the past week, the Adani Group's market value bounced back, soaring by ₹1 trillion after the Supreme Court wrapped up hearings on allegations from an American short seller.