Ambuja Cements's stock price rises by 3% as the acquisition of Penna Cement appears to add value;
The cement producer owned by the Adani Group, Ambuja Cements, announced in a regulatory filing on Thursday that it will purchase all of the shares of PCIL from Pratap Reddy and his family, the company's current promoter group. The acquisition will be entirely financed by internal accruals.
After the Adani Group company announced the acquisition of Penna Cement Industries Ltd (PCIL) at an enterprise value of ₹10,422 crore, the share price of Ambuja Cements surged more than 3% to a 52-week high in early trade on Friday. On the BSE, Ambuja Cements shares increased by as much as 3.86% to reach a new high of ₹690.00 a share.
The cement producer owned by the Adani Group, Ambuja Cements, announced in a regulatory filing on Thursday that it will purchase all of the shares of PCIL from Pratap Reddy and his family, the company's current promoter group. The acquisition will be entirely financed by internal accruals.
With a capacity of 14 MTPA for cement, PCIL currently operates 10 MTPA of that; the remaining 2 MTPA and 2 MTPA are being built in Krishnapatnam and Jodhpur and will be finished in six to twelve months. It further stated that more than 14 MTPA of cement grinding capacity will be supported by extra clinker at the Jodhpur facility, which amounts to 3 MTPA.
Analysts feel the development is positive for the company's growth ambitions and that it will add value to Ambuja Cements since it gives them a presence in the southern market. The bullish outlook for Ambuja Cements shares has not changed among analysts.
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