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Ambuja Cements, owned by the Adani Group, is doubling down on its cement empire. On Tuesday, the company announced the merger of its subsidiaries Sanghi Industries and Penna Cement Industries, with an aim to streamline operations and solidify its market position.
Under the proposed plan with Sanghi Industries, shareholders will receive 12 Ambuja Cements shares for every 100 Sanghi shares they own. Ambuja, already a promoter with a 58.08% stake in Sanghi, is looking to fully integrate the business to drive efficiency and growth.
The move comes as Ambuja Cements targets a sharp increase in production capacity. Post-merger, Ambuja’s capacity is expected to exceed 100 million tonnes per annum (MTPA) by the end of the financial year. It currently produces 89 MTPA, with an ambitious roadmap to reach 140 MTPA by 2027-28.
Ajay Kapur, CEO of Adani Group’s cement business, called the merger a strategic leap forward: “This merger aims to make our business more competitive and efficient and ultimately enhance shareholder value.” . Better management of working capital and internal funds will support the growth of our business operations.”
Sanghi Industries brings significant firepower to the table, including India’s largest single-location cement and clinker unit in Sanghipuram, Gujarat, with a clinker capacity of 6.6 MTPA and limestone reserves of thousand million tons. The site’s integrated jetty and captive power plant further strengthen its operational advantage.
Penna Cement adds scale in South India, with four integrated plants in Andhra Pradesh and Telangana and a grinding unit in Maharashtra. It operates at a capacity of 10 MTPA, with two additional plants under construction at Krishnapatnam and Jodhpur, each set to add 2 MTPA within a year.
Ambuja believes consolidation will simplify compliance, unlock cost efficiency and unify cash flow management for faster expansion.
On Tuesday, shares of Ambuja Cements fell almost 1% and closed at ₹571.50 on the NSE.
