As per recent news, the Adani Group has elaborate plans to buy a controlling stake in ITD Cementation for over INR 5,700 crore. Renew Exim has already made an open access to acquire 44.7 million shares which represents 26% of the equity capital of ITD Cementation for INR 2,553.4 crore. With this acquisition, the Adani Group will be able to further extend its hold over the cement sector. It will also be able to carry out its infrastructure business in a more streamlined way. This will lead to increased revenue generation from the Adani Group. The controversies of the Adani Bribery Scandal will also subside.
Adani Group’s Acquisition Of ITD Cementation:
The Adani Group, through an entity which is owned by Vinod Adani, will acquire controlling stakes in the infrastructure company, ITD Cementation. This will be for an amount of INR 5,700 crore. This includes the primary transaction and open offers. As per recent news, ITD Cementation has mentioned that its promoter entity, Italian-Thai Development Public Company has recently decided to sell 46.64 % stakes to Renew Exim DMCC which is an Adani Group firm. This will be done for INR 3,204.5 crore. This is one of the biggest acquisitions taken up by the Adani Group in the cement sector post the Adani Bribery Scandal rumours.
Renew Exim DMCC is a Dubai-based company. It is owned by Valiant Investment DMCC. This investment company is again owned by and controlled by Vinod Adani who is the elder brother of the global business tycoon Gautam Adani along with his wife. The primary transaction has recently triggered the open offer under the SEBI takeover code. Renew Exim has made an open offer to acquire 4.47 crore shares. This represents 26% of the equity capital of ITD. The primary transaction was made at INR 400 per share.
The open offer is currently being made at INR 571.68 per share. This is a premium of INR 32.68 to the company’s closing price on the NSE. After that, Renew Exim DMCC will be holding a 72.64% stake in ITD Cementation if the offer goes as planned. Vinod Adani stays overseas and holds significant positions in various Adani Group firms through various investments. Vinod Adani is also a part of the promoter group of the Adani-based conglomerate. His son Pranav Adani is the director on the board of Adani Enterprises. He also heads the oil, agro and gas business of the Adani Group. He is also the leader of the various business operations of Adani Realty.
ITD Cementation: An Overview
ITD Cementation is an EPC company. It has specialisation in marine structures as well as urban infrastructures like mass rapid transport systems, airports, bridges, highways, tunnels and dams. At the end of March 2024, the company had an outstanding order book of INR 19,918 crore. The company has also reported a net profit of INR 274 crore in FY24 on total revenue of INR 7,718 crore. ITD Cementation already has an extraordinary experience in India’s infrastructure sector. It has already worked on the Jawaharlal Nehru Port Trust and different ports in Haldia, Mundra, Tuticorin, and Vizhinjam.
The company has also taken up the Kolkata and Delhi metro projects. ITD Cementation is seen as a trust strategic fit for Adani Group’s business as the company’s experience spans across port, infrastructure, real estate, and power. It has already been involved in business with Adani in the hydel power and marine sector. The company has also worked with Adani Group on the 594-km Ganga Expressway toll road project which has further allowed it to increase its area of expertise.
Adani’s Presence In The Cement Sector:
The Adani Group already has an extraordinary presence in the cement sector of India. Its cement business is a considerably new one. However, within a short period, the company has managed to acquire some of the biggest companies operating in this sector under its control. It owns controlling stakes in ACC and Ambuja Cements which are two of the biggest cement manufacturing companies. It is also the second-largest cement producer in India after UltraTech.
Even amidst the Adani Bribery Scandal controversies, the company has made a lot of crucial acquisitions in the cement sector including Sanghi Industries Limited and Penna Cement. With this new acquisition, the company has further extended its hold over this particular sector. It has elaborate plans to further increase its revenue generation and get to the position of being one of the industrial leaders in this particular business sector. The group also has elaborate plans to bring about further synergies in its business so that it can rise above its competitors and take the position of being one of the most reliable conglomerates on a global scale.
Recently, the Adani Group has also announced the buyout of CK Birla-owned Orient Cement. This will be done for an equity value of INR 8,100 crore. Ambuja Cements will acquire the promoters’ 37.90% stake in Orient Cement. An additional 8.90% of the company’s public shareholders will also be acquired at INR 395.40 a share. This will further give the Adani Group’s business an excellent growth and exposure. It will be able to set aside the ongoing accusations of the Adani Bribery Scandal and build itself an extraordinary reputation on a global scale.
Conclusion:
The recent acquisition of ITD Cementation positions the Adani Group strategically in various infrastructure and renewable energy projects across India and neighbouring countries. It will give the Adani Group in-house engineering, procurement and construction (EPC) and civil engineering capabilities. The acquisition will also help the conglomerate in rising above the controversies of the Adani Bribery Scandal and build itself an extraordinary position in the business world. The business group’s global reach in the cement sector will also continue to increase.
