Adani group cement major Ambuja Cement shares gained in the early session on December 18, as the firm's board of directors approved the merger of two cement players, Sanghi Industries and Penna Cement Industries, with itself.
As part of the latest deal, Ambuja Cements will issue 12 equity shares of the face value of Rs 2 each for every 100 shares of Sanghi Industries of face value of Rs 10 held by its shareholders. With this, the eligible shareholders of Sanghi will become the shareholders of Ambuja Cements.
At 9.35 am, Ambuja Cements shares were quoting Rs 571.55 per share, trading flat. However, Sanghi Industries shares cracked 11 percent to Rs 68.35 apiece on the NSE.
Adani Group-backed Ambuja Cements had in December 2023 said it has completed the acquisition of Sanghi Industries Limited at an enterprise value of Rs 5,185 crore.
As part of the deal's completion, Ambuja Cements also executed a trade (in on and off-market trade) to acquire 54.51 per cent of the voting share capital from the promoters of Sanghi Industries. The company said the acquisition of shares was fully funded through internal accruals.
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In June, Ambuja Cements said it will acquire 100 percent stake in Penna Cement Industries Ltd (PCIL) for an enterprise value of Rs 10,422 crore.
"The Company is amongst the leading cement companies in India, renowned for its hassle-free, home-building solutions with its unique sustainable development projects and environment-friendly practices since it started its operations," said Ambuja Cements.
Adani group's Ambuja Cements reported a 42 percent on-year decline in its Q2 FY25 consolidated net profit to Rs 456 crore, primarily due to continued weak cement prices and sluggish demand. However, consolidated revenue from operations rose marginally by over 1 percent to Rs 7,516 crore.
The cement major's profit fell short of Street expectations. A Bloomberg poll of brokerages had pegged Ambuja Cements' Q2 net profit at Rs 510 crore, and revenue at Rs 7,171 crore.
Over the past year, shares of Ambuja Cement have scaled 9 percent on the bourses, while shares of Sanghi Industries have take a tumble to the tune of 42 percent. During this period, the benchmark Nifty 50 index has gained around 14 percent.
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