Ambuja Cements shares surge 4% amid block deal buzz; promoter Adani family likely seller

Shares of Ambuja Cements surged over 4% in opening trade on Friday amid surge in volume trade as several block deals worth ₹4,251 crore of stake in the company changed hands over the counter. The names of buyers and sellers were not known immediately but a report suggests that the Adani Group-owned entity Holderind Investments was looking to sell a 2.84% stake in the cement maker through block deal. The floor price for the deal has been reportedly fixed at ₹600 per share, a 5% discount to the last closing price of ₹631.80 per share on August 22.

Driven by strong volume, Ambuja Cements shares gained as much as 4.2% to ₹659.70, while the market capitalisation rose to ₹1.61 lakh crore. The stock price of Ambuja Cements touched its 52-week high of ₹706.85 on August 2, 2024, while it slipped to a 52-week low of ₹404 on November 1, 2023. The cement heavyweight has given 43% returns in the last one year; nearly 22% in the calendar year 2024; and 8% in the past six months. The counter has corrected nearly 6% in a month.  

As per the latest shareholding available on the exchanges, the promoter group collectively owns a 70.33% stake in Ambuja Cements, out of which Holderind Investments holds 50.90% shares.

Post the acquisition from Swiss parent Holcim, in October 2022, Ambuja Cement had allotted of 47.74 crore warrants to Harmonia Trade and Investment Limited, a part of the Adani Family, at an initial subscription amount of ₹104.72 per warrant, which was 25% of the issue price of ₹418.87. As per the deal, each warrant, convertible into one equity share, needed to be subscribed within 18 months from the date of allotment of warrants.

In April this year, billionaire Gautam Adani and his family completed an investment of ₹20,000 crore in the group's cement arm by fully subscribing to its warrants program. The fresh investment follows the infusion of ₹5,000 crore on October 18, 2022, and ₹6,661 crore on March 28, 2024, which was for part issuance of the shares.

Last week, the Adani Group company informed exchanges that it completed acquisition of a 100% stake in Hyderabad-based Penna Cement, promoted by P Prathap Reddy and family, which was “fully funded through internal accruals”. This is the third major acquisition in the last one year after My Home Group's grinding unit in Tuticorin (Tamil Nadu) and Gujarat-based Sanghi Industries.

Earlier in April this year, Ambuja Cements, the cement and building material arm of Adani Group, inked a pact to acquire My Home Group's 1.5 MTPA cement grinding unit in Tuticorin, Tamil Nadu. As per the company, the estimated cost of the acquisition is ₹413.75 crore, which will be funded through internal accruals.

Besides, in August last year, Ambuja Cements acquired Gujarat-based Sanghi Industries at an enterprise value of ₹5,000 crore.

As per media report, Adani Group is looking for several acquisitions in the cement sector as part of its strategies to become the largest cement manufacturer in India. This includes Gujarat’s Saurashtra Cement, Vadraj Cement owned by ABG Shipyard, and Jaiprakash Associates’ cement business, as per The Economic Times report.

Currently, Adani Cement, including Ambuja and its subsidiaries ACC and Sanghi Industries, is the country’s second-largest cement producer after Aditya Birla Group’s UltraTech Cement, with the group’s cement capacity of 78.9 MTPA and 18 integrated cement manufacturing plants as well as 19 cement grinding units across the country.

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