Concrete

ACC-Ambuja: Know about the cement industry?s most anticipated bidding

Cement leaders have been aggressively running to grab the Holcim assets

Published

4 years ago

April 29, 2022

admin

As tension mounts and speculations continue being made, the Indian cement industry has been closely watching the progress of Holcim Group?s exit from the country. The Swiss giant set off a whirlwind by putting its two listed cement arms ? ACC and Ambuja ? out in the market to evaluate options for their stake sale.

Holcim holds a 63.19 per cent share in Ambuja and 4.48 per cent in ACC, which is an Ambuja subsidiary. Ambuja additionally holds its own stake of 50.05 per cent in ACC. Holcim Group?s global cement capacity as of the current financial year is 293 mtpa with around 24 per cent of its total capacities housed in India. Ambuja?s current reported grinding capacity is 31.4 mtpa with plans to expand capacity to 39.9 mtpa by 2024, while ACC?s has been calculated at 34.9 mtpa to be increased to 39.7 mtpa by the first half of the next year.

These numbers mean that any player who manages to take over both ACC and Ambuja will be adding a combined pan-India capacity of 66 mtpa, promptly shooting any global player to a second position.

The contenders

The world?s largest cement maker reportedly has been believed to have held early-stage negotiations with JSW Cement and Adani Group to gauge their interests in this acquisition, with news reports indicating UltraTech as another formidable contender in this race. Apart from these, a few regional players such as Shree Cement have been approached as well.

JSW Cement has a grinding capacity of approximately 15 mtpa. It primarily depends on imported clinkers since its present clinker capacity is 3.2 mtpa only. Shiva Cement, a JSW subsidiary, will increase its clinker capacity by 1.36 mtpa and cement capacity by 1 mtpa.

UltraTech has a consolidated capacity of 119.95 mtpa while Adani does not have a presence in the cement market as of date, but has been planning its foray into the cement industry under its subsidiary Adani Cement Industries formed in July 2021.

Shree Cement?s grinding capacity is 46.4 mtpa and has been consistent in its capacity additions, however, it has done only one acquisition in the domestic market and may reportedly face regulatory hurdles if it shows its interest in this deal.

The investment

Ambuja?s market capitalisation is Rs 764.77 billion and that of ACC?s is Rs 433.89 billion, together making the companies? total market cap at Rs 1.20 trillion. If signed, this deal stands to reportedly be one of the largest in the country.

The bids for the two assets are expected to be upwards of $10 billion. As Motilal Oswal?s recent cement sector update report mentions, ?Holcim will prefer a cash deal and not a share swap if it has plans to exit the Indian operations. This acquisition will require a huge investment by the acquirer and will make the complete exit a tall task.? The report adds that the acquirer will have to give an open offer in both the companies. The huge investments may lead to leveraging of the acquirer?s balance sheet, which generally is not favoured for a cyclical business.

Recent developments point out that JSW Cement has a couple of US private equity funds keen on this opportunity backing its funding, while Adani has reportedly tied up with multiple foreign banks such as Deutsche Bank and Barclays and domestic banks such as ICICI Bank and Axis Bank for funding the deal.

Benefits to the sector

This deal, if it goes through, should be positive for the sector in the near-to-medium term as the acquirer might not chase growth CAPEX immediately, the Motilal Oswal report observes. ?Acquisition by the Adani group, if it happens, may also alleviate concerns of an entry of a new aggressive player in the sector as the group?s immediate focus will be on streamlining the operations in the near term. In the long run, however, sector dynamics would depend on the growth plans and aggressiveness of the acquirer.?

ACC has undertaken expansion plans in the Central markets, whereas Ambuja has recently announced its expansion plans in the East. Holcim will obtain 1 per cent of the turnover of ACC and Ambuja as technology and know-how fees.

Everyone involved in the divestment, however, continues to be tightlipped. With a portfolio as impressive as Holcim?s, the industry awaits the results of perhaps the most anticipated and aggressive bidding the Indian cement industry has seen in recent times.

Up Next

ACC-Ambuja: Know about the cement industry?s most anticipated bidding

Don't Miss

Ramco Cements to utilise green energy for clinker production

Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

Published

1 week ago

July 20, 2026

admin

Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.

Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.

He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.

The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.

Concrete

Cement Prices to Stay Flat in Q2 FY27 as Costs Squeeze Margins

HDFC Securities warns monsoon slowdown and higher fuel costs

Published

1 week ago

July 17, 2026

admin

HDFC Securities has said the cement industry is unlikely to register a sequential increase in prices in Q2 FY27 as monsoon-related demand moderation coincides with rising fuel and packaging costs that will squeeze margins. The brokerage observed that price gains remained modest, with increases of two to three per cent quarter-on-quarter across regions, and noted subdued offtake in May with improvement in June as a delayed monsoon supported construction activity. The brokerage added that modest pricing gains so far have been insufficient to offset the input cost escalation.

The report stated that input cost pressures intensified in Q1 FY27 owing to the West Asia conflict, which pushed up coal and pet coke prices and is expected to keep fuel costs elevated, with a likely peak in Q2 FY27. It assessed that total variable costs, including packing, could rise by around Rs 150 per t quarter-on-quarter and that lower offtake and seasonal operating deleverage could further raise operating expenditure by about Rs 50 per t quarter-on-quarter.

Overall, cement prices were estimated to remain flat in Q2 FY27 as monsoon-led demand weakness offsets limited upside in realisation, and rising fuel costs alongside seasonal deleverage were expected to compress industry margins by over Rs 100 per t quarter-on-quarter to below Rs 880 per t. The brokerage indicated that the combined impact of energy inflation and higher packing expenditure would be the principal drivers of margin contraction in the near term. HDFC Securities projected a recovery in margins in H2 FY27 should the West Asia turmoil subside and energy and packing costs cool off.

The brokerage expressed optimism on long-term demand fundamentals and said improving realisation together with an anticipated cost cool-off should support a margin rebound from H2 FY27 onward, underpinning favourable industry prospects over the medium term. Its outlook rests on monsoon normalisation and a decline in imported fuel prices in the second half of the fiscal year.

Concrete

Dalmia Bharat Begins Rs 31 Bn Green Cement Unit in Kadapa

New Andhra Pradesh plant to add 9.6 MTPA cement capacity by FY28

Published

2 weeks ago

July 16, 2026

admin

Dalmia Bharat Limited recently laid the foundation stone for its second manufacturing unit at Kadapa in Andhra Pradesh. The company will invest Rs 31 billion in developing the next-generation integrated cement manufacturing facility.

The foundation-laying ceremony was attended by Nara Lokesh, Andhra Pradesh Minister for Information Technology, Electronics and Communications, Real-Time Governance and Human Resources Development, along with Puneet Dalmia, Managing Director and Chief Executive Officer, Dalmia Bharat, senior government officials and company representatives.

Scheduled to be commissioned by the third quarter of FY28, the Kadapa unit will become Dalmia Bharat’s largest integrated manufacturing facility in southern India. It will have a clinker production capacity of 6.1 million tonnes per annum and a cement manufacturing capacity of 9.6 million tonnes per annum.

The facility is designed to produce what the company describes as one of the world’s greenest cements. It is also expected to generate approximately 1,000 direct and indirect employment opportunities while supporting local MSMEs, transporters, contractors and service providers.

Lokesh said the investment reflected Dalmia Bharat’s confidence in Andhra Pradesh and aligned with the state’s objective of promoting sustainable industrialisation, job creation and technology-led economic growth.

Puneet Dalmia said the project represented the company’s long-term vision of developing low-carbon cement manufacturing assets. He added that the facility would establish new benchmarks in operational efficiency and sustainability while supporting India’s infrastructure and environmental goals.

Dalmia Bharat will also expand its regional community development programmes in education, healthcare, skill development and welfare through its DIKSHa and Gram Parivartan initiatives.

The company currently has an installed cement manufacturing capacity of 54.7 million tonnes across 19 manufacturing units in 12 states. It is also the first cement company globally to commit to the RE100, EP100 and EV100 initiatives.