Ambuja Cements Ltd has announced the acquisition of Penna Cement Industries Ltd (PCIL). The deal, valued at an enterprise worth of Rs 10,422 crore, involves Ambuja Cements obtaining 100 per cent ownership of PCIL from its current promoters, P Pratap Reddy and family. This acquisition will be fully financed through internal accruals.
Ajay Kapur, CEO & Whole Time Director, Ambuja Cements, highlighted the strategic importance of this acquisition. “This landmark acquisition is a significant step forward in Ambuja Cements’ accelerating growth journey. By acquiring PCIL, Ambuja is poised to expand its market presence in south India and reinforce its position as a pan-India leader in the cement industry. PCIL’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment. Importantly, the bulk cement terminals (BCTs) will prove to be a game-changer by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route. Our aim is to make PCIL highly competitive on cost and productivity and improve its operating performance.”
Penna Cement Industries currently boasts a cement capacity of 14 million ton per annum (MTPA), with 10 MTPA already operational. The remaining 4 MTPA capacity is under construction in Krishnapatnam and Jodhpur, expected to be completed within the next 6 to 12 months. Notably, around 90 per cent of PCIL’s capacity is supported by railway sidings, with some plants benefiting from captive power and waste heat recovery systems. Additionally, surplus clinker from the Jodhpur plant could enhance cement grinding capacity by another 3 MTPA.
This acquisition not only strengthens Ambuja Cement’s foothold in southern India but also facilitates entry into new markets such as Sri Lanka via sea routes, leveraging bulk cement terminals. The transition will also see PCIL’s existing dealers integrating into Adani Cement’s extensive market network, creating synergies and boosting overall market presence.