Ambuja Cements has announced its acquisition of a 45.7% stake in Orient Cement Limited (OCL), in a deal valued at approximately ₹8,100 crore. The transaction, priced at ₹395.40 per share, will trigger an open offer of 26% to acquire additional shares from public shareholders. This acquisition will be entirely funded through internal accruals.
With this strategic move, Ambuja Cements is set to add 8.5 MTPA of operational capacity, bringing its total operational capacity to 97.4 MTPA. This acquisition also positions Ambuja to surpass the 100 MTPA mark by the end of FY25, with plans to reach 140 MTPA by FY28.
The acquisition of OCL, with its strong foothold in the South and West Indian markets, will further increase Ambuja Cements’ market share across India by 2%. Additionally, OCL’s ready-to-execute projects, which amount to an additional 8.1 MTPA, and high-quality limestone reserves in Chittorgarh, Rajasthan, provide significant future growth opportunities, particularly in Northern India.
The integration of OCL’s assets is expected to optimize logistics costs and improve capacity utilization, with potential cost savings from streamlined operations and increased geographic reach. The company anticipates capacity utilization to ramp up to 85% over the next three years, and aims to achieve an EBITDA of ₹1,500 per tonne by FY28, with a target return on capital employed (ROCE) exceeding 15%.
This acquisition is a crucial step in Ambuja Cement’s broader strategy to strengthen its cost leadership in the cement industry, enhancing operational efficiency and bolstering its balance sheet as it prepares for further growth in the Indian market.
