In a major deal, Adani Group's Ambuja Cement has agreed to purchase Penna Cement Industries Ltd (PCIL) for an enterprise value of Rs 10,422 crore. The acquisition of the Hyderabad-based firm will be made using internal finances and help Ambuja gain a stronger footing in South India.
PCIL has a cement capacity of 14 million tonnes spread across Andhra Pradesh, Telangana and Rajasthan. With this buy, Ambuja Cement's total capacity will rise to 89 million tonnes per annum, taking it closer to its long term target of 140 million tonnes by 2028.
The integrated plants of PCIL feature railway sidings and some have captive power and waste heat recovery systems. Its upcoming facilities in Krishnapatnam and Jodhpur will add 4 million tonnes in the next 6-12 months. Ambuja Cement aims to leverage PCIL's strategic location and limestone reserves to potentially expand output.
The deal strengthens Adani Cement's logistics network with bulk cement terminals in Eastern and Southern India. It will support distribution to port cities and even Sri Lanka via sea routes. Existing dealers of PCIL will join Ambuja Cement's nationwide network following the change in ownership.
The acquisition improves Adani Cement's national market share by 2% and its grip in the South by approximately 8%. It comes as the infrastructure giant pursues its objective of having one-fifth of India's cement sector by 2027-28 versus the current 14%.
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