The ‘man in a hurry’ billionaire Gautam Adani has raised $13 billion (₹1.04-lakh crore) by pleading the group’s entire stake in Ambuja Cement and ACC bought from Holcim Group on Friday.
Adani Group, which owns about 63 per cent in Ambuja Cement and 57 per cent in ACC, have been encumbered “for the benefit of certain lenders and other finance parties”, according to separate filings made by the cement companies.
Endeavour Trade and Investment Ltd and Xcent Trade and Investment Ltd, entities linked to the Adani Group, are part of the agreements under which the shares have been pledged. The encumbered stake in ACC and Ambuja Cement was valued at $13 billion.
Catalyst Trusteeship has been appointed as the onshore NDU (non-disposal undertaking) agent in respect of the agreement entered into among Endeavour, Xcent, Deutsche Bank AG (as the agent) and Catalyst (as the onshore NDU agent) for recording the relevant NDU in the depository system on behalf of the finance parties, said the cement companies.
ACC and Ambuja Cement have cumulative cash balance of ₹8,400 crore as of June-end and a fund infusion of ₹20,000 crore by Adani Group will help the companies increase their cement capacities by 70 million tonnes per annum (25 mtpa inorganic expansion and 45 mtpa organic expansion) by 2026 without leveraging the balance sheet, said Sanjeev Kumar Singh, Research Analyst, Motilal Oswal.
The new promoters have already announced plans to double the group’s cement capacity over the next five years and become the largest and most efficient company by 2030. The group has environmental clearance and expansion plans for over 25 mtpa of clinker capacities and the fundraising will help pursue inorganic growth opportunities, too. Adani Group has set a target to increase the cement capacity to 140 mtpa in five years.
With the presence in the energy and logistics sector, Adani Group expects to improve the cost dynamics and aid supply-chain efficiencies. In a bid to drive the expansion plans, Adani Group has inducted Ajay Kapur as whole-time director and CEO of Ambuja Cement while Gautam Adani will take over as the Chairman.
On the ACC front, Gautam Adani’s son Karan Adani will take over as chairman and incumbent Sridhar Balakrishnan will take charge as CEO and whole-time director.
Historically, ACC and Ambuja Cement have been laggards in capacity additions and their installed capacities grew at a CAGR of a mere 2 per cent each over FY11-22, while their peers registered capacity expansion at a CAGR of 6-13 per cent, said Singh.