The recent capital injection will aid the group in reaching its cement business’s target capacity of 140 million tonnes annually by 2028.
₹8,339 crore into Ambuja Cements
On Wednesday, billionaire Gautam Adani’s Adani family, as promoters, injected ₹8,339 crore into Ambuja Cements Ltd., their cement subsidiary, by fully subscribing to its warrants program.
This brings the Adani family’s total investment in the country’s second-largest listed cement maker to ₹20,000 crore, while also raising their stake by an additional 3.6% to approximately 70.3%.
After investing ₹5,000 crore on October 18, 2022, and ₹6,661 crore on March 28, 2024 (part of which was for share issuance), the Adani group, which acquired Ambuja Cements in 2022, has made this latest capital infusion.
Ajay Kapur, CEO and whole-time director of Ambuja Cements, stated, “This fund infusion offers Ambuja the flexibility for accelerated growth, capital management initiatives, and a robust balance sheet.”
“This reflects our unwavering faith in our vision and business model, reaffirming our dedication to sustainable value creation for stakeholders. It will drive us to set new benchmarks, accelerate growth, and maintain operational excellence, synergies, and cost leadership,” Kapur elaborated.
The recent action, as per the group’s statement, underscores their commitment to robust capital management and the promoter’s aspiration to bolster the cement vertical’s future prospects.
“The additional investment will strengthen the company’s financial standing, empowering it to pursue ambitious growth plans and seize emerging market opportunities,” the statement emphasized.
The company noted that this fresh capital injection will aid in achieving the target capacity of 140 million tonnes per annum by 2028 in the cement business. It will facilitate strategic initiatives such as debottlenecking capex for improved operational performance and enhancing efficiencies across resources and the supply chain.
“This will also spur innovation and product enhancement through advanced technology integration, enhancing service offerings to meet the growing needs of the sector, driven by India’s economic growth,” the statement added.
Barclays Bank PLC, MUFG Bank, Mizuho Bank, and Standard Chartered Bank served as advisors for the transaction.
Ambuja Cements, along with its subsidiaries ACC Ltd. and Sanghi Industries Ltd., collectively contributes to the Adani Group’s cement capacity, totaling 77.4 million tonnes, with 18 integrated cement manufacturing plants and 18 cement grinding units nationwide.
In the quarter ending December 2023, Ambuja Cements reported a 39% increase in net profit, reaching ₹514 crore compared to ₹369 crore in the same quarter of the previous year. Revenue from operations rose by 8% to ₹4,439.52 crore in the December quarter, up from ₹4,128.52 crore in the corresponding period of the previous year.
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