NCLT Approves Ambuja Cements' Merger with Sanghi Industries

NCLT Sanctions Landmark Cement Merger

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has officially approved the scheme of amalgamation for Sanghi Industries Limited to merge with Ambuja Cements Limited. The order, pronounced on February 9, 2026, marks a significant milestone in the Adani Group's strategy to consolidate its cement business under a single, powerful entity. This judicial green light removes the final major regulatory hurdle, paving the way for the complete integration of Sanghi Industries into the Ambuja Cements framework.

In its ruling, the NCLT bench, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma, concluded that the merger scheme is beneficial for both companies. The tribunal stated that the arrangement would not be detrimental to the interests of shareholders, creditors, or the public. The decision underscores the strategic logic of the merger, which aims to enhance operational efficiency, consolidate resources, and create a more robust market player.

Details of the Amalgamation Scheme

The sanctioned scheme outlines a clear path for the integration. The 'Appointed Date' for the merger has been set retrospectively to April 1, 2024. This means that for all accounting and financial purposes, the amalgamation is considered effective from that date, ensuring a seamless transition of financial records. The merger will formally take effect upon the completion of all remaining procedural steps and filings with the Registrar of Companies.

A key component of the scheme is the share exchange ratio. Shareholders of Sanghi Industries will receive 12 new 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 of this process, Sanghi Industries will be dissolved without undergoing a separate winding-up process, and its shareholders will become shareholders of Ambuja Cements.

Strategic Rationale and Background

The merger is the culmination of a strategic acquisition initiated by Ambuja Cements. In December 2023, Ambuja completed the acquisition of a 58.08% stake in Sanghi Industries at an enterprise value of approximately ₹5,185 crore. Following this, the board of Ambuja Cements announced its intention in December 2024 to merge Sanghi Industries, along with Penna Cement Industries, into the parent company. The primary objective is to streamline the organizational structure, eliminate operational redundancies, and simplify compliance requirements.

By integrating Sanghi's operations, Ambuja Cements expects to achieve significant economies of scale, reduce overhead costs, and improve overall cost management. This consolidation is a central pillar of the Adani Group's ambition to become India's leading cement manufacturer, enhancing its capacity and market reach, particularly in the western regions.

Key Merger Details at a Glance

Sanghi's Assets and Synergistic Value

Sanghi Industries brings substantial assets to the newly combined entity. Its manufacturing facility in Sanghipuram, Gujarat, is one of India's largest single-location cement and clinker plants. The company possesses a clinker capacity of 6.6 million tonnes per annum (MTPA) and a cement capacity of 6.1 MTPA. Critically, it holds limestone reserves estimated at one billion tonnes, securing raw material supply for decades. The facility's integrated captive jetty and power plant further enhance its operational efficiency and logistical capabilities, offering a significant competitive advantage.

Regulatory Journey and Stipulations

The path to NCLT approval involved a meticulous regulatory process. The companies filed their second motion petition on November 24, 2025, after securing no-objection letters from stock exchanges, including the BSE and NSE, on July 17, 2025. During the proceedings, the Income Tax Department raised no objections but requested that its rights to recover any outstanding tax dues from Sanghi Industries be protected. The NCLT incorporated this into its final order, ensuring that all tax liabilities of the transferor company will be enforceable against the amalgamated entity, Ambuja Cements.

Market Impact and Future Outlook

The successful amalgamation of Sanghi Industries significantly strengthens Ambuja Cements' position in the highly competitive Indian cement market. The increased capacity and strong presence in Western India position Ambuja to compete more effectively with the market leader, UltraTech Cement. This move is a critical step towards Ambuja's stated goal of reaching a cement production capacity of 140 MTPA by the financial year 2028. The consolidation is expected to improve cash flows, support faster expansion, and ultimately deliver enhanced long-term value to shareholders.

Conclusion

The NCLT's approval for the Ambuja-Sanghi merger is a pivotal moment for the Adani Group's cement business. It validates the strategic vision of consolidation and clears the way for realizing substantial operational synergies. While the final effective date awaits the completion of procedural formalities, the most significant legal hurdle has been overcome. Market observers will now be watching closely as Ambuja Cements integrates Sanghi's extensive operations and continues its journey toward industry leadership.