Adani Group's Cement Consolidation: NCLT Gives Nod to Ambuja Cements Merger

Adani Group's Cement Consolidation: NCLT Gives Nod to Ambuja Cements Merger

Introduction

The National Company Law Tribunal (NCLT) has approved the merger of Adani Cementation with Ambuja Cements, a move that will consolidate Adani Group's cement business under one unit and bring synergistic benefits. This strategic decision aims to enhance value addition for both companies and increase shareholder value.

Factual Background

Adani Group, led by billionaire Gautam Adani, announced a merger and ownership restructuring of its cement assets in June 2024. The merger involves Adani Cementation, part of Adani Enterprises, and Ambuja Cements. Adani Group entered the cement sector in September 2022 by acquiring controlling stakes in Ambuja Cement from Swiss firm Holcim for USD 6.4 billion.

Procedural Background

The Ahmedabad bench of the NCLT sanctioned the Scheme of amalgamation of Adani Cementation with Ambuja Cements on July 18, 2025. The effective date of the amalgamation is April 1, 2024. The intergroup merger is based on share swapping, with Adani Enterprises set to receive 8.7 million shares of Ambuja Cements.

Reasoning & Analysis

The NCLT order stated that the merger will lead to enhanced value addition for both companies and increase shareholder value. It will enable Ambuja Cements to absorb Adani Cementation's cement business, enhancing manufacturing capacity more efficiently and economically. The merger will also facilitate improved utilization of combined resources, lower overheads, and reduce compliance requirements.

Findings

The NCLT has directed Ambuja Cements to comply with all applicable regulations, circulars, and directions issued by market regulator SEBI and bourses BSE, NSE, and Luxembourg Stock Exchange. Key benefits of the merger include:

1. Enhanced Manufacturing Capacity: Ambuja Cements aims to reach 118 MTPA by FY 2026 and 140 MTPA by FY 2028, primarily through brownfield expansion projects.

2. Improved Resource Utilization: The merger will facilitate better utilization of combined resources, reducing overheads and compliance requirements.

3. Increased Shareholder Value: The merger is expected to lead to enhanced value addition for both companies, increasing shareholder value.

Implications

The merger will consolidate Adani Group's position as the second-largest cement manufacturer in the country, with over 100 million tonnes per annum (MTPA) capacity. Adani Cementation has lease rights to limestone mines with resources of about 275 million tonnes at Lakhpat, Gujarat, and plans to set up a manufacturing unit at Raigad, Maharashtra.

Final Outcome

The NCLT's approval of the merger marks a significant step in Adani Group's cement business consolidation. With this move, Ambuja Cements will absorb Adani Cementation's cement business, enhancing its manufacturing capacity and resource utilization. The Indian cement market is led by Aditya Birla Group firm UltraTech Cement Ltd, which has a consolidated capacity of 192.26 MTPA.