• Home
  • Business
  • Adani Group's Ambuja Cements Trims Stake in Sanghi Industries to Meet Public Shareholding Norms

Adani Group's Ambuja Cements Trims Stake in Sanghi Industries to Meet Public Shareholding Norms

Adani Group's Ambuja Cements sheds 2% stake in Sanghi Industries to comply with SEBI's minimum public shareholding requirements. This article explores the reasons behind the divestment, the broader acquisition, and its impact on India's cement landscape

Adani Group's Ambuja Cements Trims Stake in Sanghi Industries to Meet Public Shareholding Norms

Adani Group's building materials subsidiary, Ambuja Cements, is set to offload a 2% stake in Sanghi Industries, a Gujarat-based cement manufacturer it acquired in December 2023. This move comes as Ambuja seeks to comply with the Securities and Exchange Board of India's (SEBI) minimum public shareholding norms.

 

Balancing the Scales: Divestment for Regulatory Compliance

SEBI regulations mandate that listed companies in India must maintain a minimum public shareholding of 25%. Following its acquisition of a controlling stake in Sanghi Industries, Ambuja Cements' ownership exceeded this threshold. To achieve regulatory compliance and ensure continued listing on the stock exchange, the divestment of a 2% stake becomes necessary.

 

The sale, amounting to approximately 51.66 lakh shares, will take place through open market transactions over a period of nearly eleven months, commencing March 13, 2024, and concluding by February 6, 2025, or upon the sale's completion.

 

A Strategic Acquisition: Bolstering Adani Group's Cement Play

The Sanghi Industries acquisition in December 2023 marked a significant step for Adani Group's foray into the cement sector. Ambuja Cements acquired a 56.74% stake in Sanghi Industries at an enterprise value of Rs 5,000 crore. This strategic move bolstered Adani Group's cement footprint and production capacity.

 

Sanghi Industries boasts the country's largest single-location cement and clinker unit by capacity, situated in Gujarat's Kutch region. The acquisition also included a captive jetty and a power plant, strategically enhancing Ambuja Cements' logistics network for efficient transportation of the produced cement to coastal regions of Maharashtra, Karnataka, and Kerala.

 

Building a Cement Giant: Synergies and Future Outlook

The combined entity of Ambuja Cements and ACC, another Adani Group company in the cement sector, holds a dominant position in the Indian market. Following the Sanghi Industries acquisition, their total capacity has grown significantly, reaching 74.6 million tonnes per annum (MTPA) from the previous 68.5 MTPA.

 

This strategic consolidation presents several advantages for the Adani Group. The larger capacity allows them to cater to a broader market base and potentially gain economies of scale in production and logistics. Additionally, Sanghi Industries' well-established infrastructure, including the captive jetty and power plant, strengthens the overall operational efficiency of the combined entity.

 

Looking Ahead: Adani Group's Cement Ambitions

The Adani Group's maneuvers in the cement sector signify its ambitious plans to become a major player in the Indian market. With the strategic acquisition of Sanghi Industries and the ongoing divestment to comply with regulations, Ambuja Cements is poised for significant growth.

The divestment process is likely to be closely monitored by market participants, with potential implications for Sanghi Industries' stock price. However, the long-term outlook for the Adani Group's cement business appears promising, given the combined strengths of Ambuja Cements, ACC, and Sanghi Industries.

 

This development has the potential to reshape the competitive landscape of India's cement industry. The increased capacity and strategic presence of the Adani Group could lead to price fluctuations or market share adjustments in the coming years. Industry experts will be keenly observing how other major cement players respond to this consolidation.

 


SIDBI Takes Flight: Signs MoU with Airbus Helicopters to Finance Civil Aviation in India

SIDBI Takes Flight: Signs MoU with Airbus Helicopters to Finance Civil Aviation in India

The Small Industries Development Bank of India (SIDBI) ventures into uncharted territory, signing a ...
Byju's Advisory Panel Suffers Blow as Kumar, Pai Exit Amidst Legal Turmoil

Byju's Advisory Panel Suffers Blow as Kumar, Pai Exit Amidst Legal Turmoil

Byju's faces another setback as Rajnish Kumar and TV Mohandas Pai decide not to renew their cont...
SBI Gears Up for Leadership Change: Khara's Successor to be Named Soon

SBI Gears Up for Leadership Change: Khara's Successor to be Named Soon

The hunt for SBI's next chairman is on! With Dinesh Khara's retirement in August, FSIB will ...
Abbott Aims for Gender Parity, STEM Education Push in 2030 Sustainability Plan

Abbott Aims for Gender Parity, STEM Education Push in 2030 Sustainability Plan

Abbott announces a two-pronged approach to its 2030 Sustainability Plan, aiming for 45% female repre...
Tata Motors Invests Big in New Products and Technologies: JLR Gets Lion's Share

Tata Motors Invests Big in New Products and Technologies: JLR Gets Lion's Share

Tata Motors hikes investment outlay for FY25 to Rs 43,000 crore, with a focus on new products and te...
Adani Group Denies Supplying Low-Grade Coal, Shares Recover After Initial Dip

Adani Group Denies Supplying Low-Grade Coal, Shares Recover After Initial Dip

Adani Group refutes allegations of supplying low-quality coal to a state-owned power company, callin...
Quick Commerce Heats Up: Established E-commerce Players Join the Race for Ultra-Fast Deliveries

Quick Commerce Heats Up: Established E-commerce Players Join the Race for Ultra-Fast Deliveries

The quick commerce market in India is witnessing a surge in activity, with established e-commerce gi...
Nestle India Shareholders Reject Royalty Hike Proposal to Swiss Parent Company

Nestle India Shareholders Reject Royalty Hike Proposal to Swiss Parent Company

Shareholders of Nestle India have voted against a proposal to increase royalty payments to its Swiss...
Smytten: Discover New Favorites with Trial Packs

Smytten: Discover New Favorites with Trial Packs

Smitten with the idea of trying new beauty products before committing to full-size versions? Let'...
PM Modi's Endorsement of Entrepreneurs Receives Backing from Indian Business Leaders

PM Modi's Endorsement of Entrepreneurs Receives Backing from Indian Business Leaders

Prime Minister Narendra Modi's recent defense of entrepreneurs and wealth creators has been met ...