Adani Group Acquires Penna Cement for 10,422 Crore

Ambuja Cements, a subsidiary of the Adani Group, is purchasing Penna Cement Industries for Rs 10,422 crore. This acquisition adds 14 million tonnes to Ambuja's annual cement production capacity, increasing the Adani Group's total capacity to 89 million tonnes per year. This expansion makes the Adani Group the second-largest cement producer in India, significantly boosting its market position in the domestic cement industry.

Hyderabad: Ambuja Cements of the Adani Group is buying Penna Cement Industries, which is operating from Hyderabad, for Rs 10,422 crore. This gives Ambuja Cements an annual cement production capacity of 14 million tonnes. As a result, the Adani Group cement production capacity will reach 89 million tonnes, making it the second-largest domestic cement company.

The latest acquisition will allow the Adani Group to increase its market share in the southern states as well as in Sri Lanka. This is because Penna Cement has a subsidiary company in Sri Lanka. Ambuja Cements also owns the limestone mines that Penna Cement owns.

Ambuja Cements announced on Thursday that it has agreed with the company's promoter P Pratap Reddy and his family to buy a 100% stake in Penna Cement Industries. Ajay Kapoor, CEO of Ambuja Cements, revealed that they are buying Penna Cement with their funds. He stated that due to this, Ambuja Cements will be available in all markets across the country. He said that this purchase is in line with their expansion goals

Penna Cement Industries recorded a consolidated turnover of Rs 1,241 crore in 2023-24. The company has cement units in Andhra Pradesh, Telangana and Rajasthan. The company has an annual production capacity of 14 million tonnes of cement. At present, production activities are going on to the extent of 10 million tonnes. Two million tonnes capacity units are under construction at Krishnapatnam (Andhra Pradesh) and two million tonnes capacity units at Jodhpur (Rajasthan). These units will go into production during the next year.

Advantage for the Adani Group

Adani Group's maritime facilities division has bulk cement terminals in Kolkata, Gopalpur, Karaikal, Kochi and Colombo. The purchase of Penna Cement will enable these terminals to function efficiently. Along with this, Adani Group's market share in the cement sector across the country will increase by 2% and 8% in the South.

140 tonnes capacity target by 2028

Adani Group is expanding its cement production capacity. The Adani Group aims to achieve an annual production capacity of 140 million tonnes by 2028 and a 20% share of the domestic cement market. For this purpose, while building new units on its own, it is also acquiring other cement companies.

It may be recalled that in December 2023, it acquired Sanghi Industries in Gujarat for Rs 5,185 crore. It will come together with Penna Cement units and railway sliding facilities at strategic locations. It also has power generation plants and heat recovery facilities. With the surplus clinker available at the Jodhpur unit, an additional three million tonnes of cement grinding capacity can be provided. They added that strategies are being prepared to significantly increase the performance of Penna Cement

Four cement companies

Adani Group owns ACC Limited, Ambuja Cements and Sanghi Industries. And now, it acquired Penna Cement. Our country currently has a cement production capacity of around 550 million tonnes. Ultratech Cement continues to be the largest company with an annual production capacity of 152 million tonnes. With a capacity of around 89 million tonnes, the Adani Group has become the second-largest cement producer in a very short period.