Ambuja signed a biding agreement on Thursday to buyout the entire holding of the existing promoter, P Pratap Reddy, and propose to fund the deal through internal accruals. The company expects to complete the deal in 3-4 months.

The surplus clinker at the Jodhpur plant provides an opportunity to support an additional 3 MTPA cement grinding capacity, said the company.

Of the overall capacity, only 10 MTPA is operational, and the remaining 4 MTPA under construction at Krishnapatnam and Jodhpur is expected to be completed in 6 to 12 months.

About 90 per cent of the cement capacity comes with railway sidings, and some are supported by captive power plants and waste heat recovery systems.

Market expansion

Ajay Kapur, CEO and Whole-Time Director, Ambuja Cements, said the company is poised to expand its market presence in south India and reinforce its position as a pan-India leader in the cement industry.

Penna’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment, he said.

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The bulk cement terminals will prove to be a game changer by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route, he added.

“Our aim is to make Penna highly cost-competitive and improve its operating performance,” said Kapur.

Penna Cement’s consolidated turnover last fiscal year was down 38 per cent to ₹1,241 crore against ₹2,002 crore in FY23. It was ₹3,204 crore in FY22.

Capital infusion

In April, billionaire Gautam Adani’s family pumped in the last tranche of ₹8,339 crore of the planned ₹20,000 crore equity infusion in Ambuja and raised their stake to 70 per cent.

The acquisition will enhance Ambuja’s capacity to 103 MTPA from the current 89 MTPA after the ongoing projects are completed in the next one year. Gautam Adani-led Ambuja has been on an acquisition spree to catch up with the market leader, Aditya Birla Group-owned UltraTech Cement, which has a capacity of 153 MTPA across the country.

Late last year, Ambuja acquired 6 MTPA plants from Sanghi Industries for ₹5,185 crore. The Sanghi plant in Gujarat is spread over 2,700 hectares with a captive jetty.

In April, the Adani Group company acquired My Home Group’s 1.5 MTPA cement grinding unit at Tuticorin in Tamil Nadu for ₹413.75 crore to enhance its coastal footprint across the southern markets of Tamil Nadu and Kerala.

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