Ambuja Cements to Merge Sanghi Industries and Penna Cement

Ambuja Cement, one of the leading enterprises within the Adani Group, is going to merge its subsidiaries Sanghi Industries (SIL) and Penna Cement Industries (PCIL) into itself; this attempt will facilitate consolidation of its operations and improvements in efficiency within the cement business.

The merger agreement includes an exchange of Ambuja Cements shares with SIL shareholders, which consists of 12 shares of Ambuja Cements for every 100 shares of SIL, each with a face value of Rs 10. The merger is subject to the approval of concerned stakeholders and regulators and is expected to close within 9-12 months.

Benefits of the merger have been stressed by Ajay Kapur, the group CEO of the Cement Business of the Adani Group, as better management of working capital; growing internal fund generations for continued growth; and common, simpler compliances with lower administrative costs. Cash flow management is going to be streamlined, accelerating growth and making operations more efficient.

Sanghi industries have established an extensive infrastructure; with a clinker capacity of 6.6 MTPA and cement capacity of 6.1 MTPA, Sanghipuram is the industry’s largest single-location cement and clinker unit in India, equipped with its exclusive jetty and a captive power plant.

Penna Cement is active throughout Andhra Pradesh, Telangana, and Maharashtra, with operations producing 10 MTPA and is currently developing two new plants in Krishnapatnam and Jodhpur, which are expected to start in 8-12 months. In addition, Penna has built five bulk cement terminals across India and in Colombo, Sri Lanka.

This merger is a significant step for Ambuja to strengthen its standing in the fierce Indian cement industry.