Ambuja Cements Shares Fall Even After Adani Group Prepays $500 Million Loan

Adani Group repaid $2.15 billion in loans due by March 31 and prepaid Ambuja Cements' debt.

Shares of Ambuja Cements were in the red in a weak market on March 13 despite Adani Group prepaying a $500 million loan for the Ambuja deal.

At 12:16 pm, Ambuja Cements was quoted at Rs 373.50 on the BSE, down Rs 4.85 or 1.28%. It touched an intraday high of Rs 389 and an intraday low of Rs 373.45.

Promoters prepaid a $500 million loan to buy Ambuja as the power-to-port conglomerate seeks to boost investor confidence after a Hindenburg research report accused of stock manipulation and flagged the group’s debt load.

“This aligns with the promoters’ commitment to increase their equity contribution, which has now injected $2.6 billion out of the total acquisition value of $6.6 billion for Ambuja and ACC,” said the Gautam Adani-led conglomerate.

Adani added that the entire prepayment program was completed within six weeks, which “demonstrates strong liquidity management and capital access at sponsor level, complementing the solid capital prudence adopted by all portfolio companies”.

In a deal worth $10.5 billion, Adani Group acquired Holcim Group’s entire stake in two Indian companies, Ambuja Cements and ACC. This is Adani’s largest-ever acquisition and India’s largest-ever M&A deal in the infrastructure and materials sector.

Holcim sold its 63.19% interest in Ambuja Cements Ltd and its 54.53% interest in ACC, of ​​which 50.05% was held through Ambuja Cements Ltd, to Adani Group.

Earlier, Moody’s Investors Service said India would see strong demand for cement in FY23 and FY24. According to Moody’s report, India’s cement production is expected to grow around 6-8% in fiscal years 2023 and 2024, following a 21% rise in the fiscal year ending March 2022.

The rating agency believes India’s infrastructure-led investment, large-scale residential projects and broad-based economic growth will keep cement demand healthy.

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