Adani Injects US$799 million for bigger stake in Ambuja Cements

Indian billionaire Gautam Adani and his family invested US$799 million to boost their stake in Ambuja Cements, in a sign of confidence that the cement maker is well-positioned to benefit from the country’s infrastructure boom.

The capital infusion will bolster the Adani family’s holdings by 3.6 per cent to 66.7 per cent and help Ambuja reach an annual cement production capacity of 140 million tonnes by 2028, according to a company statement filed on Thursday (Mar 28). 

Cement is an increasingly crucial resource as Prime Minister Narendra Modi pushes to modernise India’s creaking infrastructure, while demand for real estate in the world’s most populous country grows. 

The latest Adani investment comes through Harmonia Trade and Investment, a family-owned entity that acquired over 477 million convertible warrants from Ambuja Cement for 50 billion rupees (S$809.9 million) in October 2022 – at 25 per cent of the issuing price. Harmonia has now chosen to convert 212 million of the warrants into Ambuja shares in exchange for shares at a price of 416.87 per share.

Adani bought a controlling stake in Ambuja Cements and ACC for US$10.5 billion in 2022 in a deal financed by loans from global banks. The loans were refinanced last year by Barclays Bank, Deutsche Bank and Standard Chartered after the company recovered from a scathing attack from US-based short-seller Hindenburg Research. 

The short-seller’s bombshell report, which accused the group of fraud and “brazen” stock price manipulation, wiped out more than US$100 billion in value at one point. 

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Adani’s ports-to-power conglomerate has not only bounced back but is flexing renewed confidence. The group has raised billions in fresh equity from sovereign wealth funds and private equity investors like GQG Partners and Qatar Investment Authority, while retail investors have piled into the group’s stocks. The group’s combined market value stands at US$188 billion, compared with a low of US$82 billion in February last year.

“This infusion of funds provides Ambuja capital flexibility for fast-tracked growth, capital management initiatives and best-in-class balance sheet strength,” said Ajay Kapur, chief executive officer at Ambuja Cements. BLOOMBERG