Adani Cement Consolidation: NCLT Approves Ambuja Merger

Introduction to the Consolidation

The National Company Law Tribunal (NCLT) has officially approved the merger of Adani Cementation Limited with Ambuja Cements Limited. This ruling marks a pivotal moment in the Adani Group's strategy to streamline its rapidly growing cement business. The consolidation, effective from April 1, 2024, is designed to create a more efficient, integrated, and powerful entity in India's competitive infrastructure and materials sector. The move follows a series of aggressive acquisitions and aims to unlock significant synergistic benefits, positioning the group to challenge the market leader.

The NCLT Sanction and Its Details

On July 18, the Ahmedabad bench of the NCLT sanctioned the Scheme of Amalgamation, making it legally binding on both companies, their shareholders, and creditors. The merger is structured as an inter-group transaction based on a share swap. Under the terms, Adani Enterprises Limited (AEL), the parent of Adani Cementation, will receive 8.7 million shares of Ambuja Cements. This arrangement facilitates the seamless transfer of all assets, rights, and liabilities from Adani Cementation to Ambuja Cements without any further act or deed. The NCLT has also directed Ambuja Cements, a publicly listed company, to ensure full compliance with all regulations stipulated by SEBI and the stock exchanges where it is listed, including the BSE, NSE, and the Luxembourg Stock Exchange for its Global Depository Receipts (GDRs).

Strategic Rationale for the Merger

Adani Group entities have outlined a clear rationale for this consolidation. The primary goal is to enhance value for shareholders by creating a more robust and efficient operational structure. By absorbing Adani Cementation, Ambuja Cements can enhance its manufacturing capacity more economically and accelerate construction activities at various project sites. This integration is expected to lead to improved utilization of combined resources, a significant reduction in overheads, and simplified compliance requirements. Adani Cementation brings valuable assets to the table, including lease rights to limestone mines with approximately 275 million tonnes of resources in Lakhpat, Gujarat, and a proposed manufacturing unit in Raigad, Maharashtra, which will now fall under Ambuja's expansion pipeline.

Adani's Rapid Ascent in the Cement Sector

Adani Group's entry into the cement industry has been both recent and impactful. The conglomerate made its definitive move in September 2022 by acquiring Swiss giant Holcim's controlling stakes in two of India's most established cement brands, Ambuja Cements and ACC Ltd. The transaction, valued at USD 6.50 billion, was India’s largest-ever M&A deal in the infrastructure and materials space. This single acquisition instantly established the Adani Group as the second-largest cement manufacturer in the country. Post-transaction, Adani holds a 63.15% stake in Ambuja Cements and a 56.69% stake in ACC, with a significant portion of the ACC stake held through Ambuja.

A Pattern of Aggressive Expansion

Following the foundational acquisition of Ambuja and ACC, the Adani Group has pursued a strategy of aggressive inorganic growth to bolster its market position. The group has acquired several smaller companies to expand its footprint across different regions. Notable acquisitions include Hyderabad-based Penna Cement, Saurashtra-based Sanghi Industries, and Orient Cement from the CK Birla group. These moves are part of a broader plan to create a single, consolidated 'One Cement Platform'. In December 2025, Ambuja Cements announced plans to merge Sanghi Industries and Penna Cement into the parent company, further simplifying its corporate structure and strengthening its market hold.

Market Position and Future Ambitions

With these strategic mergers and acquisitions, Adani Group's cement production capacity has already crossed the 100 million tonnes per annum (MTPA) mark. The company has set an ambitious target to increase this capacity to 140 MTPA by the financial year 2028. This expansion will be driven primarily through brownfield projects and the integration of newly acquired assets. The Indian cement market, however, remains dominated by Aditya Birla Group's UltraTech Cement, which boasts a significantly larger capacity. The table below illustrates the current market landscape.

Leveraging the Adani Ecosystem

One of the Adani Group's key competitive advantages is its ability to create synergies between its diverse business verticals. Gautam Adani, Chairman of the Adani Group, has emphasized that the cement business benefits from the group's expertise in energy, logistics, and distribution. As one of the world's largest renewable energy producers, the group plans to manufacture 'green cement' in line with circular economy principles. This integration allows for significant cost efficiencies in energy consumption and supply chain management, which are critical drivers of profitability in the cement industry. The Board of Ambuja Cements also approved an infusion of INR 20,000 Crore through preferential warrants to fuel this market growth.

Governance and Stakeholder Focus

In line with its governance philosophy, the Adani Group has reconstituted the board committees of both Ambuja Cements and ACC. The Audit Committee and the Nomination & Remuneration Committee are now composed entirely of independent directors. Furthermore, new committees like the Corporate Responsibility Committee and the Public Consumer Committee have been established, also with 100% independent directors, to oversee ESG commitments and enhance consumer satisfaction. This focus on governance is intended to build stakeholder confidence as the company continues its expansion.

Conclusion

The NCLT's approval for the merger of Adani Cementation with Ambuja Cements is a crucial operational step in a much larger strategic vision. It reinforces the Adani Group's commitment to consolidating its assets, optimizing operations, and scaling its business to become India's largest and most efficient cement manufacturer. As the group progresses towards its 140 MTPA capacity target by 2028, the industry will be watching closely to see how this newly streamlined entity leverages its scale and integrated platform to compete in the dynamic Indian market.