NCLT Approves Ambuja-Sanghi Merger, Eyes 140 MTPA Goal

Introduction

The National Company Law Tribunal (NCLT) has officially sanctioned the merger of Sanghi Industries with Ambuja Cements, an Adani Group company. The approval, granted by the Ahmedabad bench on February 9, 2026, marks a significant milestone in the Adani Group's strategy to consolidate its cement operations and streamline its corporate structure. This move is expected to enhance operational efficiencies and strengthen Ambuja's market position as it pursues an ambitious capacity target.

The NCLT's Verdict

In an exchange filing, Ambuja Cements confirmed that the NCLT had pronounced its order sanctioning the scheme of amalgamation between the two entities. The tribunal noted that the merger is in the public interest, as it is expected to improve operational efficiency, consolidate resources, and will not negatively impact the rights of shareholders, creditors, or other authorities. The order paves the way for the full integration of Sanghi Industries into Ambuja Cements, creating a more formidable player in the Indian cement sector.

Key Terms of the Merger

The scheme of arrangement has set April 1, 2024, as the appointed date, meaning the merger will be effective retrospectively from that date for accounting purposes. The final merger will take effect once all procedural and regulatory formalities outlined in the scheme are completed. Under the terms of the agreement, shareholders of Sanghi Industries will receive 12 equity shares of Ambuja Cements (with a face value of ₹2 each) for every 100 equity shares they hold in Sanghi Industries (with a face value of ₹10 each). Following the completion, eligible Sanghi shareholders will become direct shareholders of Ambuja Cements.

Strategic Rationale and Synergies

The merger is a core component of the Adani Group's plan to create a unified and efficient cement platform. Ambuja Cements has stated that the amalgamation will allow it to fully absorb Sanghi's business, leading to a streamlined organizational structure and simplified compliance requirements. Key benefits cited include the elimination of duplicated efforts, improved cost management through economies of scale, and better utilization of combined resources. This integration aligns with the group's broader 'One Business, One Company' strategy, aimed at unlocking greater value for shareholders.

Background of the Acquisition

This merger follows Ambuja Cements' acquisition of a controlling stake in Sanghi Industries. The acquisition of a 58.08% equity stake was completed in December 2023 at an enterprise value of approximately ₹5,185 crore, making Ambuja the promoter of Sanghi. The board of Ambuja Cements subsequently approved the proposal to merge Sanghi Industries with itself in December 2024, as part of a larger consolidation plan that also includes the proposed merger of Penna Cement Industries.

Sanghi's Strategic Assets

Sanghi Industries brings significant strategic assets to the combined entity. It operates a clinker capacity of 6.6 million tonnes per annum (MTPA) and a cement capacity of 6.1 MTPA. Crucially, the company holds substantial limestone reserves estimated at around one billion tonnes. Its Sanghipuram facility in Gujarat is one of India's largest single-location cement and clinker plants, complete with an integrated captive jetty and power plant. These assets are expected to bolster Ambuja's production capabilities and logistical network, particularly along the coastline.

Adani Group's Cement Ambitions

The consolidation is a critical step towards achieving the Adani Group's ambitious goal of reaching a cement production capacity of 140 MTPA by the financial year 2028. Through a series of strategic acquisitions and mergers, the group has rapidly become the second-largest cement manufacturer in India. This latest move is expected to strengthen cash flows, support faster expansion, and enhance long-term shareholder value as it competes in the highly competitive Indian market.

Market Reaction

Investors reacted positively to the news of the NCLT approval. On the day of the announcement, shares of Ambuja Cements ended the trading session 2.5% higher at ₹542.70 on the National Stock Exchange, reflecting market confidence in the strategic benefits of the merger.

Merger Summary

Conclusion

The NCLT's approval for the Ambuja Cements-Sanghi Industries merger is a pivotal development that clears the path for significant consolidation within the Adani Group's cement business. By integrating Sanghi's robust assets and streamlining operations, Ambuja Cements is better positioned to achieve its aggressive growth targets and enhance its competitive edge. The focus will now shift to completing the final procedural steps to make the scheme fully effective.