PSP Projects' share price surged 10 percent on Tuesday, 19 November, following reports that the Adani Group is in advanced discussions to acquire a majority stake in the Gujarat-based construction company. By the afternoon, PSP Projects stock was trading at Rs 708 on the NSE.
CNBC-TV18, citing unnamed sources, reported that the Adani Group is looking to purchase a 60.14 percent stake in PSP Projects from its promoters. Such a transaction would likely trigger an open offer for an additional 26 percent stake held by public shareholders, per regulatory norms.
PSP Projects currently has a market capitalisation of Rs 2,800 crore. In the last one year, the stock has fallen more than 8 percent, even after accounting for today's surge.
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This potential deal aligns with Adani Group's ambitious acquisition strategy. The conglomerate is reportedly planning investments worth $5-7 billion through the end of this financial year, focusing on expanding its presence in sectors such as cement, airports, defence, ports, power, and consumer goods, according to a recent Mint report.
Adani's acquisition spree has gathered pace following a period of slowdown triggered by allegations from US-based short-seller Hindenburg Research. While the group scaled back its acquisitions temporarily, recent deals signal a return to aggressive growth.
Notable transactions include a Rs 3,204-crore acquisition of a 46.64 percent stake in ITD Cementation India through its unit Renew Exim, and a Rs 8,100-crore takeover of CK Birla Group's Orient Cement. Both deals included mandatory open offers, with Adani gaining controlling stakes.
In the case of ITD Cementation, the acquisition is expected to strengthen Adani’s civil engineering capabilities in sectors like airports, highways, and metro projects. For Orient Cement, Adani Cement's buyout of promoter and public stakes marked one of the largest transactions in the cement industry this fiscal.
The PSP Projects acquisition could boost Adani's construction portfolio. PSP Projects specialises in engineering and construction projects.
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