Ambuja Cements, a part of Adani Cement and Adani Group, announced on Tuesday that it has signed a binding agreement to acquire a 46.8 per cent stake in Orient Cement Ltd (OCL). According to Adani, the acquisition, valued at an equity worth of Rs 8,100 crore, marks a step towards Ambuja’s goal of achieving 140 MTPA cement capacity by 2028. The deal will be fully funded through Ambuja’s internal accruals, maintaining the company’s debt-free status.
The acquisition will increase Ambuja’s cement capacity by approximately 30 MTPA within two years of Ambuja’s acquisition and is set to propel the company to reach 100 MTPA in operational capacity by FY 25. The purchase also strengthens Adani Cement’s pan-India market share, adding an estimated 2 per cent to its existing share in the cement industry. OCL, with an existing clinker capacity of 5.6 MTPA and cement operational capacity of 8.5 MTPA, also brings a portfolio of assets, including a 95 MW captive power plant (CPP), 10 MW waste heat recovery system (WHRS), and 33 MW renewable energy spread across Telangana, Karnataka, and Maharashtra.
The company’s strategic locations, high-quality limestone reserves, and statutory approvals provide an opportunity to increase cement capacity to 16.6 MTPA, making it an ideal fit for Adani Cement’s growth plans. Karan Adani, Director of Ambuja Cements, said, “This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by ~30 MTPA within two years of Ambuja’s acquisition. By acquiring OCL, Ambuja is poised to reach 100 MTPA cement capacity in FY 25. The acquisition will help to expand Adani Cement’s presence in core markets and improve its pan-India market share by 2 per cent.’
He added, “OCL’s assets are highly efficient, equipped with railway sidings and well supported by captive power plants, renewable energy, WHRS and AFR facilities. OCL’s strategic locations, high-quality limestone reserves and requisite statutory approvals present an opportunity to increase cement capacity in the near term to 16.6 MTPA.” OCL also has secured a concession from Madhya Pradesh Power Generating Company Ltd (MPPGCL) to set up a 2.0 MTPA Grinding Unit within the premises of the Satpura Thermal Power Station in Sarni, Madhya Pradesh. Additionally, its high-quality limestone mining lease in Chittorgarh, Rajasthan, opens avenues to establish another 6 MTPA cement capacity in North India.
CK Birla, Chairman of Orient Cement and the CK Birla Group, expressed confidence in the transition, stating, “The CK Birla Group is continuously reallocating capital to sharpen its focus on consumer centric, technology driven and service-based businesses.” He added, “I take pride in Orient Cement’s impressive track record of building premium brands and maintaining a leading market share in the geographies it operates in. We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders.”
Amita Birla, Co-Chairman, CK Birla Group, added, “Orient Cement has a strong market presence, with sustainability initiatives, particularly in renewable energy, being a significant part of its DNA. I am convinced that Ambuja Cements is the right home for all our colleagues at Orient Cement, as well as our customers.”
OCL has recently commissioned a WHRS in Chittapur IU and is in the final stage of commissioning 16 MW solar in Chittapur and 3.7 MW solar in Jalgaon. OCL’s efficient plants, highly motivated teams, strong balance sheet and well-distributed dealer network will be excellent additions to the Adani Group’s existing cement business. OCL’s existing dealers will move to Adani Cement’s market network, creating formidable synergies. Ambuja plans to optimize OCL’s overall capacity utilization to enhance its cost and competitiveness and improve its operating performance while leveraging the synergies inherent in the existing cement business.
