According to market observers, the acquisition of Adani Group’s Holcim stake in Ambuja Cements, a major cement company, and ACC could add Rs 1.10 lakh crore to the group’s market capitalization. At present, the market value of the group, which includes Adani Enterprise, Adani Ports, Adani Green Energy, Adani Wilmer, Adani Total Gas, Adani Transmission and Adani Power, is Rs 14.31 lakh crore. On the other hand, Mukesh Ambani-led Reliance Industries’ M-Cap is hovering around Rs 16.42 lakh crore on May 16.
Holcim, through its affiliates, owns 63.19 per cent in Ambuja Cement and 54.53 per cent in ACC (of which 50.05 per cent is through Ambuja Cement). The total stake stake and open offer consideration for Ambuja Cements and ACC is worth $ 10.5 billion, making it Adani’s largest acquisition and India’s largest consolidation and acquisition transaction in terms of infrastructure and materials.
The acquisition marks the group’s entry into the cement sector, which currently has tailwinds due to the government’s focus on reviving infrastructure and housing demand.
Ronald Seoni, AVP-researcher, Sharekhan of BNP Paribas, said: The premium of 7% and 9% fixed for Ambuja Cements and ACC stock price is positive for both the stocks. Shares of ACC rose 3.94 per cent to close at Rs 2,197.05 on May 16, while the benchmark BSE Sensex rose 0.44 per cent to close at 53,023.57. Shares of Ambuja Cement rose 2.29 per cent to close at Rs 367.
Market analysts added that the acquisition would put Adani Group at number two in India’s cement sector. “In the long run, we expect this to have a positive impact on the cement sector and the price chain will be better with the prospect of industrial consolidation,” Zioni added.
Yogesh Mehta, founder of Yield Maximizer, added that the acquisition of Brownfield’s Holcim is just an opportunity and entry into the cement sector. The total combined capacity of ACC and Ambuja Cement is 66 MT. The acquisition could add Rs 1.1 lakh crore to the group’s market capitalization, “Mehta added.
In financial terms, Adani Group of Companies posted gross sales and net profit of Rs 1,82,000 crore and Rs 12,000 crore for the year ended March 31, 2022, respectively. On the other hand, ACC and Ambuja Cements Gross posted sales of Rs 15,814.40 crore and Rs 28,965.46 crore in FY21, respectively. ACC and Amabuja Cement had net profit of Rs 1851.45 crore and Rs 3690.81 crore respectively. They have not yet announced their financial results for FY22.
Santosh Meena, head of research at Swastika Investmart, said: “The acquisition focuses on the group’s infrastructure and integration with other businesses such as energy, coal and energy, ports and logistics. The acquisition will result in additional consolidation and increased competition in the cement sector. ”
Commenting on the prospects for ACC and Ambuja Cement, Ravi Singh, vice president and head of research at Share India, said: Sector so far. Also, after a possible merger, the brand could be considered for a merger which could result in better margins and higher returns on the capital invested for the two companies. Both ACC and Ambuja stocks are good for long-term investments with targets of Rs 2,450 and Rs 420, respectively. “