The Adani Group is reportedly eyeing several high-profile cement acquisitions, including Penna Cement, Saurashtra Cement and the cement businesses of Jaiprakash Associates and Vadraj Cement.

What Happened: Armed with a $3 billion war chest, Adani is on an aggressive expansion spree, aiming to dethrone UltraTech as India's top cement producer within three to four years, Economic Times reported, citing sources. This move comes amid India’s infrastructure boom, driven by record government spending.

Penna Cement, currently expanding its capacity from 10 million to 15.5 million tonnes per annum, could be valued at up to ₹9,000 crore. Saurashtra Cement, with a market cap of ₹1,487 crore, and Jaiprakash Associates, tangled in shareholder disputes despite a ₹5,666 crore deal with Dalmia Bharat, are also on the radar.

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Adani is willing to offer $85-$120 enterprise value per ton for these mid-sized firms, potentially paying a premium for assets with growth potential, limestone mines and packing terminals, the business daily reported. The group’s recent Sanghi Cement acquisition was valued at $100 per ton.

Penna boasts a packing terminal capacity of 2.8 million tonnes per annum, Saurashtra 5 million tonnes per annum, Jaiprakash Associates 9.5 million tonnes per annum, and Vadraj 6 million tonnes per annum. Both Jaiprakash and Vadraj are undergoing bankruptcy proceedings, complicating but not deterring Adani’s ambitions.

Adani’s acquisition strategy likely involves Ambuja Cement, flush with ₹24,338 crore in cash and no debt. ACC could be a contender if synergies are stronger, especially in the south, where Adani seeks a foothold.

Price Action: While shares of ACC and Ambjua Cement were up 0.25% and down 1.11%, respectively, Saurashtra Cement’s stock climbed 6.8% and Jaiprakash Associates’ share price was up 5% in morning trade on Thursday.

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