Adani acquires Orient Cementat INR 8,100 crore equityvalue

Acquisition adds 16.6 MTPA capacity (8.5 MTPA operational, 8.1 MTPA Ready to Execute).

Accelerates Ambuja’s journey to achieve 100+ MTPA operational capacity in FY25

Provides 6 MTPA potential additional capacity in North India, leveraging OCL’shigh quality limestone reserves in Rajasthan

·         Ambuja enters into a binding agreement to acquire 46.8% stake in Orient Cement Ltd (OCL). The acquisition helps to move towards target capacity of 140 MTPA by 2028.

·         OCL has an existing5.6 MTPA clinker and 8.5 MTPA cement operational capacity, 95 MW CPP, 10 MW WHRS, 33 MW Renewable Energy spread across the states of Telangana,Karnataka and Maharashtra.It improves Adani Group’s market share pan-India by 2% in the cement industry.

·         OCL has secured a concession from Madhya Pradesh Power Generating Company Ltd (“MPPGCL”) to set up 2.0 MTPA Cement GU within thepremises of Satpura Thermal Power Station in Sarni, MP.

·         OCLalso has a large high quality limestone mining lease in Chittorgarh, Rajasthan,providing the potential to set up additional 6 MTPA capacity in North India.

·         The acquisition of OCL complements Ambuja’s existing cement footprint, reducing overall lead distancesand logistics costs for the cement business and improving market share in our core markets.

·         Acquisition will be funded through internal accruals,Ambuja remainsdebt free.

Ambuja Cements, the cement and building material company of Adani Cement and part of the diversified Adani Group, today announced the signing of a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of Rs.8,100crore. Ambuja will acquire 46.8%shares of OCLfrom its current promotersand certain public shareholders.Theacquisitionwillbefullyfundedthroughinternalaccruals.

“This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by ~30 MTPAwithin two years of Ambuja’sacquisition,” said MrKaran Adani,Director of Ambuja Cements. “By acquiring OCL, Ambuja is poised to reach 100 MTPA cement capacity in FY25. The acquisitionwillhelp to expand Adani Cement’spresence in core markets and improve its pan-India market share by 2%. OCL’s assets are highly efficient, equipped with railway sidings and well supported by captive power plants, renewable energy, WHRS and AFR facilities. OCL’s strategic locations,high-quality limestone reserves and requisite statutory approvalspresent an opportunity to increase cement capacity in the near term to 16.6 MTPA.”

MrCK Birla, Chairman of Orient Cement and the CK Birla Group, said, “The CK Birla Group is continuously reallocating capital to sharpen its focus on consumer centric, technology driven and service-based businesses. I take pride in Orient Cement’s impressive track record of building premium brands and maintaining a leading market share in the geographies it operates in. We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders”.

MsAmita Birla, Co-Chairman, CK Birla Group, added, “Orient Cement has a strong market presence, with sustainability initiatives, particularly in renewable energy, being a significant part of its DNA. I am convinced that Ambuja Cements is the right home for all our colleagues at Orient Cement, as well as our customers.”

OCLhas 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity along with statutory clearance to increase the clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA. In addition, OCL also has a limestone mining lease in Chittorgarh for setting up an Integrated Unit (IU) with clinker of 4 MTPA and a split Grinding Unit (GU) of 6 MTPA in North India. OCL has also secured a concession from MPPGCL, Madhya Pradesh for setting up a Grinding Unit within the premises of Satpura Thermal Power Plant. Both these complementthe Adani Group’s existing cement footprint.(Refer Annexure – 1 for OCL’s location wise cement capacity and other assetsand Annexure – 2 for Adani Cement’s footprint post-acquisition of OCL.)

OCL has recently commissioned a WHRS in Chittapur IU and is in the final stage of commissioning 16 MW solar in Chittapur and 3.7 MW solar in Jalgaon.OCL’s efficient plants, highly motivated teams, strong balance sheet and well-distributeddealer network will be excellent additions to the Adani Group’s existingcement business. OCL’s existing dealers will move to Adani Cement’s market network, creating formidable synergies.

Ambuja plans to optimize OCL’s overall capacity utilization to enhance its cost andcompetitivenessand improve its operating performance while leveraging the synergies inherent in the existing cement business.