Adani family invests ₹8,339 cr more in Ambuja Cements; stake rises to 70.3%

The Adani family, led by billionaire businessman Gautam Adani, on Wednesday, said that as the promoters they have infused ₹8,339 crore into the group's cement subsidiary Ambuja Cements Ltd. by fully subscribing to the latter's warrants programme.

With this, the Adani family has infused a total of ₹20,000 crore into the country’s second largest listed cement maker and increased its stake further by 3.6% to around 70.3%.

The latest capital infusion follows an investment of ₹5,000 crore into Ambuja on 18 October 2022 and then ₹6,661 crore on 28 March 2024 (which was for part issuance of the shares). Adani group had acquired Ambuja Cements in 2022.

"This infusion of funds provides Ambuja, capital flexibility for fasttracked growth, capital management initiatives and best-in-class balance sheet strength,” said Ajay Kapur, whole time director and CEO, Ambuja Cements.

“It is not only testament to steadfast belief in our vision and business model but also reinforces our commitment to delivering long-term sustainable value creation to our stakeholders and this shall propel us towards setting new benchmarks ACCelerating our growth and continue to deliver on operational excellence, business synergies and cost leadership," added Kapur.

The latest move, according to the group’s statement, is a part of their commitment to have robust capital management and the promoter’s aim to boost future prospects and potential of cement vertical.

“The additional investment will fortify the company's financial position, providing it with enhanced capabilities to pursue its ambitious growth plans and capitalize on emerging opportunities in the market,” said the statement.

The company said the latest fund infusion will help the group achieve its target capacity of 140 million tonnes per annum by 2028 in the cement business. The investment will enable various strategic initiatives including debottlenecking capex to enhance operational performance, as well as bringing efficiencies across resources, supply chain, it said.

“This shall also drive innovation and product enhancement through advanced technology integration for better service offerings to tap the growing requirements of the sector driven by the growth in the Indian economy,” added the statement.

Barclays Bank PLC, MUFG Bank, Mizuho Bank and Standard Chartered Bank acted as advisors for the transaction.

Ambuja Cements, along with its subsidiaries ACC Ltd. and Sanghi Industries Ltd. collectively accounts for Adani Group’s cement capacity at 77.4 million tonnes with 18 integrated cement manufacturing plants and 18 cement grinding units across the country.

In the quarter ended December 2023, Ambuja Cements reported a 39% rise in its net profit at ₹514 crore as compared to ₹369 crore in the same quarter of last year. The company's revenue from operations increased by 8% to ₹4,439.52 crore in the December quarter as compared to ₹4,128.52 crore in the corresponding period of the previous year.