Gautam Adani’s Ambuja makes power move with Sanghi, Penna merger

Adani Group-owned Ambuja Cements is doubling down on its cement empire. On Tuesday, the company announced the merger of its subsidiaries Sanghi Industries and Penna Cement Industries into its fold, aiming to streamline operations and solidify its market position.

Under the proposed scheme with Sanghi Industries, shareholders will receive 12 Ambuja Cements shares for every 100 Sanghi shares held. Ambuja, already the promoter with a 58.08% stake in Sanghi, seeks to fully integrate the business to drive efficiency and growth.

The move comes as Ambuja Cements targets a sharp increase in production capacity. Following the merger, Ambuja’s capacity is projected to surpass 100 million tonnes per annum (MTPA) by the fiscal year’s end. It currently produces 89 MTPA, with an ambitious roadmap to hit 140 MTPA by 2027-28.

Ajay Kapur, CEO of Adani Group’s cement business, called the merger a strategic leap forward: “This merger aims to make our company more competitive and efficient, ultimately enhancing shareholder value. Enhanced working capital management and internal funds will support the growth of our business operations.”

Sanghi Industries brings significant firepower to the table, including India’s largest single-location cement and clinker unit in Sanghipuram, Gujarat, with a clinker capacity of 6.6 MTPA and limestone reserves of 1 billion tonnes. The site’s integrated jetty and captive power plant further strengthen its operational edge.

Penna Cement adds scale across southern India, with four integrated plants in Andhra Pradesh and Telangana and a grinding unit in Maharashtra. It operates at 10 MTPA capacity, with two additional plants under construction in Krishnapatnam and Jodhpur, each poised to add 2 MTPA within a year.

Ambuja believes the consolidation will simplify compliance, unlock cost efficiencies, and unify cash flow management for faster expansion.

On Tuesday, Ambuja Cements shares dropped nearly 1%, closing at ₹571.50 on the NSE.