Ambuja Cements, part of the Adani Group, has announced its acquisition of a controlling stake in Orient Cement Ltd. for an equity value of Rs 8,100 crore. The deal was disclosed in an exchange filing on Tuesday, October 22, and is expected to significantly boost Ambuja’s cement capacity and market share in India.
Deal Structure and Funding
Ambuja will first acquire a 46.8% stake in Orient Cement from the company’s current promoters and existing shareholders. The acquisition will be entirely funded through internal accruals, ensuring that Ambuja remains debt-free. The transaction is priced at Rs 395.4 per share, representing a 12% premium to Orient Cement’s closing price on Monday.
Open Offer Details
As part of the acquisition, Ambuja Cements will also launch an Open Offer to purchase up to 5.34 crore shares, or 26% of Orient Cement’s outstanding equity from public shareholders, at the same price of Rs 395.4 per share. This move complies with regulatory requirements after acquiring a significant stake in the company.
Capacity Expansion and Strategic Benefits
The acquisition will add a total of 16.6 million tonnes per annum (MTPA) to Ambuja’s capacity, consisting of 8.5 MTPA of operational capacity and an additional 8.1 MTPA that is ready for execution.
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Furthermore, Ambuja Cements stands to gain an additional potential capacity of 6 MTPA in North India by leveraging Orient Cement’s high-quality limestone reserves in Rajasthan. The reserves, located in Chittorgarh, are expected to play a critical role in future expansions.
Strategic Benefits for Ambuja
Ambuja Cements noted that the acquisition will complement its existing cement footprint, reducing logistics costs and lead distances while improving its market share in key regions.
“The acquisition of Orient Cement complements Ambuja’s existing cement footprint, reducing overall lead distances and logistics costs for the cement business and improving market share in our core markets,” Ambuja said in a press release.
Promoter and Shareholder Breakdown
As of the September quarter, Orient Cement’s promoters held a 37.9% stake in the company. Among public shareholders, India’s domestic mutual funds held a 13.38% stake, with major names like Bandhan Mutual Fund, Nippon Life Mutual Fund, Quant Mutual Fund, and Aditya Birla Sun Life Mutual Fund.
Ambuja Cements Stock Performance in Last One Year
The shares of Ambuja Cements have demonstrated mixed returns across various time intervals.
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