Shares of Ambuja Cements rallied nearly 4% to hit a fresh record high on Thursday after Adani Family infused another ₹8,339 crore in the country’s second largest cement manufacturer, raising its stake in the company by 3.6% to 70.3%. With this, 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.
Post the acquisition by Adani group from Holcim, in October 2022, Ambuja Cements 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.
Cheering the news, Ambuja Cements shares gained as much as 3.9% in opening trade to hit a new all-time high of ₹640.95 on the BSE, while the market capitalisation rose to ₹1.24 lakh crore.
At the time of reporting, shares of Ambuja Cements were trading at ₹626.10, up 1.47% over the previous closing price of ₹617 on the BSE. The cement heavyweight witnessed surge in buying with 1.2 lakh shares changing hands over the counter in the first hour of trade so far as compared to two-week average volume of 1.02 lakh stocks.
The share price of Ambuja Cements has risen 71% from its 52-week low of ₹373.30 touched on April 21, 2023. The counter has gained 17% in the calendar year 2024; 44% in six months; and nearly 7% in a month.
In an exchange filing on April 17, Ambuja Cements said that the promoters of the company - Adani family has fully subscribed to its warrants program by further infusing ₹8,339 crore. “This strategic move underscores unwavering commitment to have robust capital management philosophy for the portfolio companies and the latest investment testifies the commitment by Adani family to boost future prospects and potential of cement vertical,” the filing noted.
The additional investment will boost the company's financial position, providing it with enhanced capabilities to pursue its ambitious growth plans and capitalise on emerging opportunities in the market, the release highlighted.
As per the company, the funds infusion will help the company to accomplish the capacity of 140 million tonnes per annum by 2028 by the cement vertical. Further, it will also enable various strategic initiatives including debottlenecking capital expenditure to enhance operational performance, as well as bringing efficiencies across resources, supply chain.
The development came two days after Ambuja Cements signed an agreement to acquire My Home Group's 1.5 million tonne per annum (MTPA) cement grinding unit in Tuticorin, Tamil Nadu for ₹413.75 crore. In December last year, Ambuja Cements had acquired Gujarat-based Sanghi Industries Limited (SIL) at an enterprise value of ₹5,185 crore.
Ambuja, with its subsidiaries ACC Ltd. and Sanghi, has taken the Adani Group’s cement capacity to 78.9 MTPA, with 18 integrated cement manufacturing plants and 19 cement grinding units across the country. The group aims to achieve 101 MTPA capacity by 2025 and 140 MTPA by 2028 through organic and inorganic growth.
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