- Adani Cements is considering a bid for the cement assets of Kesoram Industries as part of its strategy to more than double its total production capacity to 140 million tonnes per annum (MTPA) by FY28 through inorganic means. A banker closely involved in the project revealed, “Several bankers have approached the group, assessing various options. Although there hasn’t been a response yet, indications suggest that the Adani group is keen on a significant expansion of their production capacity.”
- UltraTech Cement, the largest cement manufacturer in India, has also indicated interest in the cement assets and is currently in negotiations with the developers.
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Adani cements has $1.2 billion cash in their pocket. Another source corroborated this information, adding that the Adani Group is expected to meet with the project sponsors, following which a thorough evaluation of the property will take place.
- Kesoram Industries, active in cement, tires and tubes, heavy chemicals, and extruded pipes, markets its cement under the brand name Birla Shakti. The company operates two manufacturing plants in Sedam, Karnataka (Vasavadatta Cement), and Basant Nagar, Telangana (Kesoram Cement), with a total production capacity of 10.75 million tons. In addition to its manufacturing activities, the company provides consulting, research, commercial, and technical services.
- Adani Cement, the parent company of Adani Group cement plants—Ambuja Cement and ACC—aims to add the next 70 MTPA through both organic and inorganic growth. In August, Ambuja Cement finalized an agreement to acquire a 56.74% stake in Sanghi Industries, a prominent cement manufacturer, with an enterprise value of Rs 5,000 crore.
- With an annual cash generation of $800 million and liquidity amounting to $1.2 billion, Adani Cements is well-supported in its acquisition plans. The recent completion of a $3.5 billion debt restructuring in early October, stemming from share repurchases of the Swiss-based Holcim Group at ACC and Ambuja cement , further fortifies the company’s position. This restructuring is expected to result in a total savings of $300 million for the group’s cement industry.
- Adani Cements’ exploration of inorganic growth methods aligns with its ambitious plan to substantially increase its total production capacity to 140 million tonnes per annum (MTPA) by FY28. The company’s consideration of a bid for Kesoram Industries’ cement assets is a strategic move to achieve this expansion.
- The potential acquisition of Kesoram Industries’ cement assets by Adani Cements has attracted attention from various bankers, who are actively evaluating options. Despite not receiving a formal response, the belief persists among financial experts that the Adani group’s interest is driven by a desire to significantly enhance its production capacity.
- The ongoing negotiations between Ultratech Cement, India’s largest cement manufacturer, and the project proponents further emphasize the competitive interest in Kesoram Industries’ cement assets. The involvement of key players in the industry highlights the strategic value and potential of the assets under consideration.
- Kesoram Industries, with its diverse portfolio encompassing cement, tires and tubes, heavy chemicals, and extruded pipes, brings a multidimensional aspect to the potential acquisition. The company’s brand, Birla Shakti, coupled with its manufacturing facilities in Sedam, Karnataka, and Basant Nagar, Telangana, adds considerable value to the overall proposition.
- Adani Cements’ financial strength, reflected in its impressive annual cash generation of $800 million and liquidity of $1.2 billion, positions the company favorably for pursuing expansion opportunities. The recent completion of a $3.5 billion debt restructuring in October demonstrates the group’s commitment to optimizing its financial structure and enhancing efficiency in the cement industry.
- Adani Cement’s strategic moves in the cement sector extend beyond the potential acquisition of With plans to add 70 MTPA through both organic and inorganic routes, including the recent stake acquisition in Sanghi Industries, the company is actively shaping its presence and influence in the competitive landscape.
- Overall, the evolving dynamics within the cement industry, marked by strategic negotiations, financial restructuring, and expansion plans, underscore the sector’s resilience and the proactive approaches of key players like Adani Cements and Ultratech Cement.
