New Delhi, Jun 13 (IANS): Ambuja Cements, the leading Adani Group company, on Thursday announced the acquisition of 100 per cent stake in Penna Cement Industries Ltd (PCIL) for an enterprise value of Rs 10,422 crore, as the cement and building material major aims to reach its target capacity of 140 MTPA (million tonnes per annum) by 2028.

Ambuja Cements would acquire the 100 per cent stake from Hyderabad-based PCIL promoter group P. Pratap Reddy and family.

The acquisition, to be funded by internal accruals, will improve Adani Cement’s market share pan-India by 2 per cent and by 8 per cent in south India.

"This landmark acquisition is a significant step forward in Ambuja Cement’s accelerating growth journey," said Ajay Kapur, CEO and Whole Time Director of Ambuja Cement.

"By acquiring PCIL, Ambuja is poised to expand its market presence in south India and reinforce its position as a pan-India leader in the cement industry," he added.

PCIL has 14 MTPA cement capacity, of which 10 MTPA is operational, and the remaining is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and will be completed within 6 to 12 months. PCIL’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment.

"Importantly, the bulk cement terminals (BCTs) will prove to be a game-changer by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route," Kapur said.

The existing dealers of PCIL will move to Adani Cement’s market network to bring in formidable synergy, according to the company.

In FY24, the Adani Group successfully completed three acquisitions (Sanghi, Asian Cements. and GU in Tuticorin) as cement capacity increased by 11.4 million tonnes per annum (MTPA), taking the total capacity to 78.9 MTPA.

Meanwhile, Ambuja Cements reported profit after tax (PAT) at Rs 4,738 crore for FY24 -- up by a record-setting 119 per cent (year-on-year) -- and operating EBITDA at Rs 6,400 crore, up by 73 per cent.