Ambuja Cements Ltd., a subsidiary of the Adani Group, announced on October 22 that it will acquire a controlling stake in Orient Cement Ltd. for an equity value of ₹8,100 crore. This acquisition will increase Ambuja’s total capacity by 16.6 million tons per annum (MTPA), comprising 8.5 MTPA of operational capacity and an additional 8.1 MTPA ready for execution.
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The deal will provide Ambuja Cements with the potential to add 6 MTPA of capacity in North India, leveraging Orient Cement’s high-quality limestone reserves located in Rajasthan. The acquisition will utilize a significant limestone mining lease in Chittorgarh, enhancing operational efficiency.
Ambuja plans to first acquire a 46.8% stake in Orient Cement from existing promoters and shareholders. The acquisition will be funded entirely through internal resources, allowing the company to maintain a debt-free status. The shares will be purchased at ₹395.4 each, which represents a 12% premium over Orient’s closing price on the previous day.
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This acquisition will trigger an Open Offer, allowing Ambuja to acquire up to 5.34 crore shares (26% of the outstanding equity) from public shareholders at the same price of ₹395.4 per share. Currently, promoters hold a 37.9% stake in Orient Cement, with domestic mutual funds owning a 13.38% stake.
Key public shareholders in Orient Cement include:
- Shri Jagannath Educational Institute – 1.55%
- Sri Govinddeo Educational Institute – 1.47%
- Shri Venkateshwara Educational Institute – 1.39%
- Rukmani Birla Educational Society – 1.69%
- Birla Institute of Technology and Science – 1.72%
Ambuja Cements stated that this acquisition complements its existing operations by reducing logistics costs and improving market share in key areas. Following the announcement, shares of Ambuja Cements declined, trading at ₹571.2, while Orient Cement shares were flat at ₹352.6 after earlier gains.
