Ambuja Cements to Acquire 46.8% Stake in Orient Cement, Open Offer Triggered for Public Shareholders With this acquisition, Ambuja Cements will enhance its total operational capacity to 97.4 MTPA, fast-tracking its goal to achieve over 100 MTPA by March 2025.
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In a significant move, Ambuja Cements, part of the Adani Group, is set to acquire a 46.8 per cent stake in Orient Cement Limited (OCL), as per a regulatory filing. The transaction, valued at INR 8,100 crore, or INR 395.40 per share, has triggered an open offer for an additional 26 per cent stake from public shareholders, marking a pivotal moment in the Indian cement industry. This acquisition will be entirely funded through internal accruals and brings with it a substantial addition to Ambuja Cement's capacity. Orient Cement's operational assets include 8.5 million tonnes per annum (MTPA) of cement capacity, with 8.1 MTPA of ready-to-execute projects in the pipeline. Furthermore, the high-quality limestone reserves in Chittorgarh, Rajasthan, offer the potential to increase grinding capacity by an additional 6 MTPA, strengthening Ambuja's position in the northern Indian market.
With this acquisition, Ambuja Cements will enhance its total operational capacity to 97.4 MTPA, fast-tracking its goal to achieve over 100 MTPA by March 2025. The strategic move also aligns with Ambuja's long-term target of reaching 140 MTPA by 2028. The acquisition of OCL is expected to yield multiple operational synergies.
Orient Cement's efficient operations complement Ambuja Cements' existing assets, providing immediate opportunities for scaling, improving capacity utilization and optimizing logistics. For instance, clinker rail freight costs for the Jalgaon grinding unit (GU) are anticipated to reduce by approximately INR 150 per tonne due to clinker source swapping with Adani Cement's current network. This acquisition also supports Ambuja's strategy of cost leadership through logistics optimization and increased green power use.
"This timed acquisition marks another significant step forward in Ambuja Cements' accelerated growth journey, increasing cement capacity by ~30 MTPA within two years of Ambuja's acquisition," said Karan Adani, Director of Ambuja Cements.
Moreover, Ambuja Cements will significantly boost its presence in South and West India, expanding its market share by approximately 2 per cent. The combination of both brands—Ambuja and ACC—will likely drive increased trade sales, higher realizations, and the sale of premium cement, with projections pointing towards sustainable EBITDA levels exceeding INR 1,500 per tonne by FY28.
This acquisition further strengthens Ambuja's position as a key player in the Indian cement industry and is expected to deliver a return on capital employed (ROCE) of more than 15 per cent. With a target to ramp up capacity utilization to 85 per cent within three years, the deal represents a major step toward Ambuja Cement's journey of operational efficiency and market expansion, while accelerating its goal to become a 100+ MTPA player by 2025.
