Adani family invests Rs 6,661 cr in Ambuja Cement

Billionaire Gautam Adani‘s family has infused fresh capital of Rs 6,661 crore in Ambuja Cement to increase stake by 3.6% in the company to 66.7%.

Today’s announcement follows the infusion of Rs 5,000 crore by exercising the warrants approved by the board of the company in October 2022.

The fund infusion will be instrumental in increasing the capacity to 140 million tonnes per annum by 2028.

This shall also be instrumental in fuelling various strategic initiatives, including undertaking debottlenecking capex to enhance operational capabilities to ensure scalability as well as to bring efficiencies across resources, supply chain. This shall also drive innovation and product enhancement through advanced technology integration for better service offerings to tap the growing requirements of the sector, Amubja said in a statement.

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“This infusion of funds provides Ambuja capital flexibility for fast-tracked growth, capital management initiatives and best-in-class balance sheet strength,” Ajay Kapur, Whole Time Director and CEO, Ambuja Cements, said.

Following the announcement, shares of the cement maker were trading 1% higher. The stock has more than doubled in value in the last 2 years.

“We believe that Ambuja will be able to deliver 10-12% volume growth till FY26 (despite challenges on domestic demand front given the upcoming elections) and expect current profitability to continue. We believe that volume growth going forward will not be achieved along with growth in profitability given intense competition. Major capacity growth for Ambuja will happen by 2QFY26 and till then volume growth will be driven by Sanghi acquisition wherein profitability is still uncertain,” Centrum Broking said.

Adani Group had acquired Ambuja Cements and its subsidiary ACC Ltd from Switzerland’s Holcim Group for $6.4 billion in September 2022.

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William Murphy

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