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Ambuja Cements to acquire Tuticorin grinding unit for Rs 414 crore

Ambuja-Cements-to-acquire-Tuticorin-grinding-unit-for-Rs-414-crore

India’s most trusted cement brand and a leading cement manufacturer and supplier, Ambuja Cements Ltd., has signed a definitive agreement with My Home Industries Private Limited for the acquisition of its 1.5 MTPA Cement Grinding Unit in Tuticorin, Tamil Nadu. Located near the Tuticorin Port, the asset will be value accretive as it will aid in enhancing Ambuja’s coastal footprint across the southern markets of Tamil Nadu and Kerala.

The plant is spread across 61 acres of land with a long-term fly ash supply agreement for raw material sourcing.

The acquisition of the facility will cost Ambuja Cement around Rs. 413.75 crore. This acquisition will be funded through internal accruals and will take Adani Group’s total cement capacity to 78.9 MTPA. After the deal, it will make Ambuja India's second-largest player after Aditya Birla Group's UltraTech Cement. This acquisition provides access to southern market customers and instills trust in Ambuja Cement, one of the region's most iconic and trusted brands.

Ambuja Cement now has a cement capacity of 31 million tonnes and operates six integrated cement production facilities and eight cement grinding units around the country. The company, earlier in February, proposed setting up four MTPA cement grinding units in Godda, Jharkhand, at an investment of Rs. 1000 crore.

My Home Group, owned by Jupally Rameswar Rao, is a construction-to-media company that produces 11 million-tonne of building materials annually under the Maha Cement brand. The decision to sell the Tuticorin unit was primarily driven by commercial reasons, as it was located far from its core markets, resulting in higher freight costs.

Ajay Kapur, CEO of Cement Business at Adani Group, expressed satisfaction with the acquisition, stating that it strengthens their foothold in the region and aligns perfectly with their commitment to delivering high-quality products and services to customers. Ambuja Cements will inherit the existing dealer network and retain current employees, facilitating a smooth transition and enabling a rapid ramp-up of utilization.

Ambuja cement stock has been rising since the acquisition news breakout and is currently trading at Rs. 616.

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