Ambuja Cement acquires majority stake of Sanghi Industries at enterprise value of Rs 5,000 cr

Ambuja Cement on Thursday morning announced the acquisition of a majority stake in Sanghi Industries, one of the leading cement manufacturers from western India, at an enterprise value of Rs 5,000 crore. According to the press release, Ambuja Cement (which is part of Adani Group) will buy 56.74 per cent stake in Sanghi Industries Ltd (SIL) from its existing promoter group – Ravi Sanghi & family. According to a statement from Ambuja Cement, the acquisition will be fully funded through internal accruals. 

The deal would help Adani Cement, the second biggest manufacturer after UltraTech, to expand its capacity to 73.6 MTPA (million tonne per annum) in the segment, in which it had entered last September, after the acquisition of majority stakes in Ambuja Cement and its subsidiary ACC Ltd.

“The acquisition of SIL will help ACL (Ambuja Cements Ltd) 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 Q2 of FY24, Adani Group’s capacity will be 101 MTPA by 2025,” it said.

Commenting on the development, Adani Group Chairman Gautam Adani said, “This landmark acquisition is a significant step forward in Ambuja Cements’ accelerating growth journey.”

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

SIL’s integrated manufacturing unit at Sanghipuram in Gujarat’s Kutch district is India’s largest single-location cement and clinker unit by capacity. With 2,700 hectares of land, the 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 a Waste Heat Recovery System of 13 MW. The unit is also connected to a captive jetty at Sanghipuram. The acquisition of SIL 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 Q2 of FY24, the Adani Group’s capacity will be 101 MTPA by 2025. Given the Adani Group’s strength in building and operating marine infrastructure, the port at Sanghipuram will be expanded to handle vessel sizes of 8,000 DWT (deadweight tonnage). Bulk terminals and grinding units will be created along the western coast to enable the movement of clinker and cement through the sea route at the lowest possible cost.

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. SIL has a network of 850 dealers, with a market presence in Gujarat, Madhya Pradesh, Rajasthan, Maharashtra, and Kerala. 

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