Adani vs. Birla: Billionaires Compete for Cement Dominance in India

The race for dominance in India’s cement industry is heating up as Gautam Adani expands his empire, challenging Kumar Mangalam Birla’s UltraTech Cement Ltd. Both tycoons are eager to control the supply of this vital building material, crucial for India’s booming infrastructure projects.

Adani’s aggressive approach has sparked a rivalry with UltraTech, which has led to six deals in less than two years. On Sunday, UltraTech announced its seventh deal to acquire a regional player, and several smaller competitors are still up for grabs.

“Adani’s strategy is to dominate any sector they enter,” said Aditya Kondawar from Complete Circle Capital. “Their entry has pushed UltraTech to expand aggressively. When competition intensifies, you either step up or step aside.”

Adani Group became the second-largest cement maker in India overnight in 2022 after acquiring Ambuja Cements Ltd. and ACC Ltd. Despite setbacks in 2023, they resumed their expansion this year, leading to a turf war with UltraTech.

M&A Plans

Adani aims to double its annual production capacity to 140 million tons by 2028. The group is searching for more cement assets to expand its reach and secure key raw materials, with about $4.5 billion set aside for acquisitions over the next two years, insiders said.

Adani plans to cut costs by using sea or inland water transportation, which is cheaper than trucking. Their port network will help, along with green energy from group firms to reduce fuel costs.

UltraTech’s Strategy

To maintain its lead, UltraTech acquired a smaller competitor last year and recently took a majority stake in a Chennai-based cement maker. UltraTech plans to expand its operations to reach 200 million tons annual capacity by 2027.

India’s infrastructure investment, driven by Prime Minister Modi’s ambitious projects, is expected to reach 15 trillion rupees ($179.2 billion) by March 2026, creating massive demand for cement.

Adani recently acquired Penna Cement Industries Ltd. and has shown interest in Jaypee Group and Orient Cement Ltd. UltraTech is also eyeing Orient Cement.

Southern India as a Key Market

Southern India, with its fragmented cement market and high capacity, is a key battleground. Adani’s Penna Cement purchase in June boosted its presence in this region. UltraTech responded by acquiring a significant stake in India Cements Ltd., further consolidating its market position.

“The pace of acquisitions is driven by government spending on infrastructure and housing,” said Aveek Mitra from Aveksat Investment Advisory.

India has about 100 cement makers, many with small market shares. Large players like Adani and UltraTech will continue to acquire assets to maintain their market share, said Anupama Reddy from ICRA Ltd.

Despite Adani’s rapid expansion, UltraTech still holds a significant lead. Both companies will need to navigate anti-trust scrutiny and ensure demand remains strong enough to justify their increased capacity, noted Jyoti Gupta from Nirmal Bang Institutional Equities.