Adani aims to become India’s top cement company by 2030; rival Ultratech stepping up capacity<\/p>\n\n\n\n
The consolidation in the cement sector has picked up pace with Adani and JSW groups closing in on smaller rivals. While\u00a0Adani Group\u00a0is set to announce its second acquisition in the cement sector of Jaypee Group\u2019s cement assets at an enterprise valuation of Rs 5,000 crore, India Cements said it has sold its Madhya Pradesh (MP) limestone mine and land for Rs 477 crore to Sajjan Jindal-owned\u00a0JSW Cement.<\/p>\n\n\n\n
A larger part of Jaypee\u2019s cement business was earlier acquired by UltraTech in a deal worth over Rs 16,000 crore (22.4 million tonnes per annum, or mtpa, capacity) in 2016, and the few units retained by the debt-hit group are now being sold to\u00a0Adani Group.<\/p>\n\n\n\n
Jaiprakash Associates, the flagship company of Jaypee Group, cleared the sale of cement units at a board meeting on Monday.<\/p>\n\n\n\n
Jaiprakash Associates\u2019 stock closed at Rs 11.74 \u2014 up 10 per cent \u2014 following the announcement.<\/p>\n\n\n\n
Jaiprakash Power Ventures (JPVL) closed at Rs 8.46 per share on the BSE \u2014 up 4 per cent.<\/p>\n\n\n\n
Jaypee Group, including its subsidiary JPVL, has an installed cement capacity of 10.55 mtpa and 339 megawatt of captive power. However, the group has put on hold its Shahabad cement plant expansion plan by 1.2 million tonnes due to a liquidity crisis. Details regarding the specific assets of Jaypee being acquired by\u00a0Adani Group\u00a0are still awaited.<\/p>\n\n\n\n
Analysts said Jaypee\u2019s acquisition will boost Adani\u2019s plans to become India\u2019s leading cement company by 2030 as it aims to double its capacity from 70 mtpa to 140 mtpa by 2030.<\/p>\n\n\n\n
Adani rival UltraTech has announced increasing its capacity from 120 mtpa to 160 mtpa by 2030.<\/p>\n\n\n\n
JSW plans to touch 25 mtpa of cement capacity by 2024-25, from 17 mtpa.<\/p>\n\n\n\n
JSW Cement, which had made a $7-billion offer for Ambuja Cements, is becoming aggressive by acquiring India Cements\u2019 units. But its offer was not accepted by Holcim, Ambuja\u2019s then Swiss owner, over fears of the Competition Commission of India\u2019s objections.<\/p>\n\n\n\n
Apart from MP units,\u00a0JSW Cement\u00a0also made an attractive offer to buy India Cements\u2019 Rajasthan unit, beating UltraTech of Aditya Birla Group, said bankers.<\/p>\n\n\n\n
India Cements had started working at the 3 mtpa plant in MP last year with land acquisition. The project also has backward linkages to limestone \u2014 a key raw material to make cement. The acquisition will give\u00a0JSW Cement\u00a0an entry into the central Indian market.<\/p>\n\n\n\n
JSW Cement has so far raised Rs 2,000 crore in 15 months to fund its capacity expansion. It raised a Rs 400-crore sustainability loan last week from Japan\u2019s MUFG Bank. It also raised Rs 1,500 crore from investors Apollo Global Management and Synergy Metals in July and Rs 100 crore from State Bank of India last December.<\/p>\n\n\n\n
In May, India Cements indicated it was open to selling some of its land to pare debt. As of March 31 this year, the company had a net debt of Rs 3,039 crore. This was an increase of 1.43 per cent over the previous year, when net debt was at Rs 2,996 crore.<\/p>\n\n\n\n
According to a recent report by CRISIL, cement volume growth in 2022-23 is likely to be in the region of 8-10 per cent \u2014 the highest since 2018-19. Growth will be aided by infrastructure and construction sectors, prompting key players to seize scale opportunities through acquisitions.<\/p>\n\n\n\n
Koustav Mazumdar, associate director, CRISIL Research, said, \u201cCement volume growth this financial year will be driven by the non-housing segments, wherein offtake is expected to rise more than 15 per cent. Demand from the infrastructure segment will be aided by government spending, while industrial and commercial demand will be driven by growing investment in data centres and warehousing.\u201d<\/p>\n\n\n\n
Source:https:\/\/www.business-standard.com\/article\/companies\/consolidation-picks-pace-in-cement-sector-jsw-adani-to-buy-smaller-units-122101000468_1.html<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Adani aims to become India’s top cement company by 2030; rival Ultratech stepping up capacity The consolidation in the cement[…]<\/p>\n","protected":false},"author":1,"featured_media":5180,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-updates"],"aioseo_notices":[],"a3_pvc":{"activated":false,"total_views":0,"today_views":0},"_links":{"self":[{"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/posts\/5179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/comments?post=5179"}],"version-history":[{"count":2,"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/posts\/5179\/revisions"}],"predecessor-version":[{"id":5182,"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/posts\/5179\/revisions\/5182"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/media\/5180"}],"wp:attachment":[{"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/media?parent=5179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/categories?post=5179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/apkwebtech.com\/site\/wp-json\/wp\/v2\/tags?post=5179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}