Adani's $3 Billion Bet: Trio Of Acquisitions Planned For Cement Market Dominance

After acquiring a controlling stake in Swiss giant Holcim's cement businesses, the Adani Group is now evaluating several cement companies for potential acquisition.

According to a report by Economic Times, the companies under consideration include Hyderabad-based Penna Cement, Gujarat-headquartered Saurashtra Cement, the cement business of Jaiprakash Associates, and Vadraj Cement, owned by ABG Shipyard.

The Adani Group is setting aside a $3 billion war chest for these acquisitions. The group is aggressively pursuing an inorganic growth strategy to boost its capacity and become the largest cement manufacturer within the next three to four years, surpassing Aditya.

Following the strategic acquisition of ACC and Ambuja Cements, and the successful commissioning of the Ametha Integrated Unit, the Adani Group's combined cement capacity has increased from 67 MTPA to 78.9 MTPA.

In addition, in August 2023, Ambuja Cements Ltd (ACL) acquired Sanghi Industries Ltd (SIL) for an enterprise value of Rs 5,000 crore.

With ongoing capital expenditure of 14 MTPA and the commissioning of Dahej capacity by the second quarter of FY24, the Adani Group’s capacity is projected to reach 101 MTPA by 2025.

The acquisition of SIL will help ACL strengthen its market leadership and achieve its target of 140 MTPA of cement manufacturing capacity by 2028, ahead of schedule.

India's cement giants have charted an aggressive expansion plan as they believe that demand for cement across all sectors will continue to remain strong which is highly favourable for its performance.

Higher infrastructure spending ahead of the general elections in 2024 is expected to further propel cement demand during this fiscal.