Ambuja Cements’ ₹10,422 Crore Penna Purchase: Adani’s Big Move in South India and Sri Lanka

Ambuja Cements, part of the Adani Group, will fully acquire Penna Cement Industries Limited. This purchase, worth ₹10,422 crore, will help Ambuja expand its reach in South India and enter the Sri Lankan market.

Ambuja Cements announced on Thursday that it will buy 100% of Penna Cement’s shares, making Penna a wholly owned subsidiary. The deal will be paid for using Ambuja’s own funds.

Boost in Production Capacity

This acquisition adds 14 million tonnes of cement production capacity to Ambuja Cements. Currently, Penna Cement has 10 million tonnes in operation. An additional 4 million tonnes are under construction at Jodhpur and Krishnapatnam and will be completed by the seller within the next year.

Ambuja Cements’ total production capacity will now be 89 million tonnes per year. This move brings them closer to their goal of 140 million tonnes by 2028.

The acquisition will boost Ambuja’s market share in South India by 8%, making it 15%, and increase their overall market share across India by 2%.

Opportunities for Further Expansion

Penna Cement has extra clinker capacity at the Jodhpur plant, which could be used to increase cement grinding by 3 million tonnes annually. This could benefit Ambuja in the northern Indian market. Penna Cement also has surplus land and limestone reserves at their integrated units, allowing for further expansion. Most of Penna’s plants have railway sidings, which will help with logistics, except the Talaricheruvu plant.

The acquisition will also enhance Adani Cement’s sea transport capabilities with bulk cement terminals at Kolkata, Gopalpur, Karaikal, Kochi, and Colombo, making it easier to serve the peninsular Indian market and beyond.

Ambuja Cements and the Adani Group believe this deal will help them grow faster and strengthen their market position both in India and internationally.