Ambuja Gautam Adani moves into power with Sanghi and Bina merger

Adani Group-owned Ambuja Cements is doubling its cement empire. The company on Tuesday announced the merger of its subsidiaries Sanghi Industries and Penna Cement Industries into its fold, with the aim of streamlining operations and strengthening its position in the market.

Under the proposed scheme with Sanghi Industries, shareholders will get 12 Ambuja Cements shares for every 100 Sanghi shares held. Ambuja, the promoter which holds 58.08% stake in Sanghi, is seeking a complete integration of the business to drive efficiency and growth.

The move comes at a time when Ambuja Cements is targeting a sharp increase in production capacity. Post the merger, Ambuja’s capacity is expected to exceed 100 million tons per annum (MTPA) by the end of the financial year. It currently produces 89 million tons per year, with an ambitious roadmap to reach 140 million tons per year by 2027-2028.

Ajay Kapoor, CEO of Adani Group’s cement business, described the merger as a strategic leap forward: “This merger aims to make our company more competitive and efficient, ultimately enhancing shareholder value. It will enhance working capital management Internal funds will support the growth of our business operations.

Sanghi Industries brings significant strength to the table, including India’s largest single-site cement and clinker unit in Sangipuram, Gujarat, with a clinker production capacity of 6.6 million tons per annum and limestone reserves of 1 billion tons. The integrated dock and site-constrained power plant enhance its operational capabilities.

Penna Cement is adding scale across South India, with four integrated plants in Andhra Pradesh and Telangana and a grinding unit in Maharashtra. It operates at a capacity of 10 million tons per annum, with two additional plants under construction in Krishnapatnam and Jodhpur, each expected to add 2 million tons per annum within a year.

Ambuja believes the merger will simplify compliance, unlock cost efficiencies, and standardize cash flow management in order to scale faster.

On Tuesday, Ambuja Cements shares fell nearly 1%, closing at Rs 571.50 on the NSE.