Adani group to acquire majority stake in ITD Cementation for ₹5,700 cr

Billionaire Gautam Adani-led Adani Group has entered into an agreement to acquire a controlling stake in ITD Cementation India from its Thailand-based promoter, Italian-Thai Development Public Company Ltd (ITD). The power-to-port conglomerate’s unit Renew Exim DMCC proposes to buy a majority stake in the engineering and construction, including the primary transaction and open offer, for a total consideration of over ₹5700 crore.

In an exchange filing last evening, ITD Cementation said that its Thai promoter signed a deal to sell its 46.64% stake to Renew Exim DMCC for ₹3,204 crore.

The acquisition has triggered an open offer under the SEBI takeover norms, allowing Renew Exim to make an open offer to acquire an additional 26% shares in ITD Cementation from public shareholders for ₹2,553 crore.

The floor price for the primary deal was ₹400 per share, a discount of 25.8% over the ITD Cementation stock’s last closing price of ₹539. On the other hand, the open offer has been made at ₹571.68 per share, a premium of 6% over the last trading price.

Post primary deal and open offer, Adani Group’s shareholding in ITD Cementation would be 72.64%, assuming that the open offer gets fully subscribed.

ITD Cementation established its operations in India in 1931 as a branch of The Cementation Company Ltd, U.K., a member of Trafalgar House Group of London, for carrying out extensive grouting and drilling works to the hydraulic structures which were then growing at rapid pace. Over the years, the company has emerged as an engineering and construction firm undertaking heavy civil, infrastructure and EPC business. In 2004, Italian-Thai Development Public Company entered into a share purchase to acquire a stake in the company.

The acquisition is likely to boost Adani’s civil engineering capabilities as it is looking for expansion in sectors such as airports, highways, and metro projects.

Earlier this week, Adani group-led Ambuja Cements signed a deal to acquire a 46.8% stake in Orient Cement Ltd (OCL) for an equity value of ₹8,100 crore or ₹395.40 per share. The transaction will triggere an open offer of 26% to acquire shares from public shareholders. The current deal comes following Ambuja Cements' acquisition of Penna Cement Industries for ₹10,422 crore in June this year.

With this deal, Ambuja is aiming to take parent Adani Cement's operational capacity to 97.4 million tonnes per annum (MTPA) by March 2025. Explaining the rationale behind the investment, Ambuja says Orient will help it increase its presence by 8.5 MTPA in the core market of South & West India and pan India by 2%. Ambuja says it plans to optimise OCL’s overall capacity utilisation to enhance its cost and competitiveness and improve its operating performance.