Adani to infuse Rs20,000 cr into Ambuja Cements via preferential issue
28 September 2022
The Adani Group, which on Friday completed the takeover of ACC and Ambula Cements, overhauled the boards of the two listed entities and announced plans to infuse Rs 20,000 crore into Ambuja Cements through a preferential allotment of shares.
The reconstituted board of Ambuja Cement will be chaired by Gautam Adani. His son Karan Adani will chair the board of ACC. NS Sekhsaria, the industrialist who founded Ambuja Cement and remained as its non-executive chairman after the sale of the company to Holcim, has been now designated as chairman emeritus.
Under the new dispensation, former Ambuja Cement CEO and managing director Ajay Kapur will continue to lead the company in the same role, taking over from Neeraj Akhoury. Sridhar Balakrishnan will continue to lead ACC but with a changed designation of whole-time director and CEO (from managing director and CEO.) Vinod Bahety will be the chief financial officer of both companies.
Rajnish Kumar, former chairman of State Bank of India, has joined the Ambuja Cement board as an independent director.
The capital infusion would "further strengthen" Ambuja's balance sheet and help enhance capacity through further acquisitions and investments in technology.
The preferential shares of Ambuja Cements will be issued to Harmonia Trade and Investment, which is listed as a promoter entity of Adani Green Energy. The shares would be issued at a price of Rs418.87 - a premium of almost 9 per cent to the company’s offer piece of Rs385 per share during the open offer.
This preferential allotment would also be the biggest, reflecting "Adani's commitment" to the cement business and intent for the "complete transformation" of the cement industry.
Reliance Industries’ 2008 allotment of Rs16,824-crore preferential shares in favour of its promoters was so far held the record.
The acquisition was made by the Adani Family through Endeavour Trade and Investment Ltd, a special purpose vehicle.
The two companies together own the second largest cement capacity in the Indian market - behind Aditya Birla Group's UltraTech Cement.
"What makes cement an exciting business is the headroom for growth in India, which exceeds that of every other country well beyond 2050," Adani Group chairman Gautam Adani said in a statement.
"Cement is a game of economics dependent on energy costs, logistics and distribution costs, and the ability to leverage a digital platform to transform production as well as gain significant supply chain efficiencies," Adani said.
The Ambuja Cement stock ended at Rs516.3 on the BSE on Friday, 4.19 per cent lower than the previous close. It has gained over 40 per cent in four months since the deal between the Adani Group and Holcim was announced on 15 May.
The new acquisitions also propelled Gautam Adani to second place in terms of personnal wealth globally, for a brief period, according to Forbes.