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Monday, July 22, 2024

Adani Group Injects Rs 6,661 Crore into Ambuja Cements

The Adani Group has bolstered Ambuja Cements with a capital infusion of Rs 6,661 crore by converting 21.20 crore warrants into shares, thereby increasing its stake in the country’s second-largest cement company by 3.6 percent to 66.7 percent. The board of Ambuja Cements has greenlit the conversion of 21.20 crore warrants into shares of promoter entity Harmonia Trade and Investment at a rate of Rs 314.15 per share.

This injection of funds is pivotal for the cement business of the Adani Group, which aims to ramp up its capacity to 140 million tonnes per annum by 2028, as per a statement from billionaire Gautam Adani-owned Ambuja Cements.

This investment follows a previous infusion of Rs 5,000 crore by the promoters into the company to exercise the warrants issued and approved by the board in October 2022.

With this recent investment, the Adani family has upped their stake in the company by 3.6 percent, now holding 66.7 percent of the shares. Ambuja Cements also holds a controlling stake in another cement firm, ACC Ltd.

Previously, on October 18, 2022, Ambuja Cements had allotted 47.74 crore convertible warrants to Harmonia, a member of the promoter group, at an initial subscription amount of Rs 104.72 per warrant, constituting 25 percent of the issue price of Rs 418.87.

Subsequently, Harmonia has chosen to convert 21.20 crore warrants into equity shares of Ambuja Cements, each with a face value of Rs 2.

In a meeting held on March 28, 2024, the board of Ambuja Cements approved the allotment of 21.20 crore equity shares of the company at a premium of Rs 416.87 per share, following the conversion of 212,030,758 convertible warrants against the receipt of the balance subscription amount of Rs 314.15 per warrant (i.e., 75 percent of the issue price) to Harmonia.

With this infusion, promoters have invested a total of Rs 11,661 crore in Ambuja, bolstering its capital flexibility for accelerated growth, capital management initiatives, and maintaining a robust balance sheet for various strategic initiatives.

Ambuja Cements CEO Ajay Kapur stated that this influx of funds provides flexibility for expedited growth, capital management initiatives, and ensures a strong balance sheet. He emphasized the commitment to delivering sustainable value creation to stakeholders and driving growth through operational excellence, business synergies, and cost leadership.

Ambuja, along with its subsidiaries ACC Ltd, currently has the capacity to produce 77.4 million tonnes of cement annually from 18 integrated cement manufacturing plants and 18 cement grinding units across the country. Recently, it acquired Sanghi Industries Ltd.

In September 2022, the Adani Group acquired controlling stakes in Ambuja Cement from Swiss firm Holcim for cash proceeds of USD 6.4 billion (about Rs 51,000 crore) and later launched a Rs 31,000 crore open offer for the acquisition of an additional 26 percent stake from public shareholders.

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