UltraTech Cement, with a production capacity of 120 MTPA, would continue to be the market leader in the country, even if any Indian cement company acquires Holcim’s subsidiaries.

According to reports, Holcim is looking to sell its businesses in India, including its stake in Ambuja Cement, and is in talks with JSW Group and Adani Group. The Switzerland-based building materials conglomerate holds a 63.1% stake in Ambuja and a 4.48% stake in ACC, while Ambuja also holds a 50.05% stake in ACC.

India is the second-largest cement producer in the world, accounting for about 8% of global cement production with an estimated production capacity of 550 MTPA.
According to Ambuja Cement’s annual report for FY21, the company has an installed capacity of 31.45 MTPA of cement, with the retail segment contributing to about 80% of its sales. On its part, ACC has a production capacity to 34.45 MTPA of cement, and together these companies have a total production capacity of 65.9 MTPA.

JSW Group had an installed capacity of 16 MTPA as of end of March 2022, and the company is targeting to increase it to 25 MTPA by FY24. Adani Group and JSW Group would be keen to acquire the stakes held by Holcim, sources said. While UltraTech is not believed to be in the race, Shree Cement had clarified that it is not interested in Holcim’s India business.

A number of private equity firms could also join the race, forming consortiums that include Adani Group or JSW Group, industry sources said.
In case of JSW Group being the successful bidder to acquire the entire Holcim’s stakes in Ambuja Cement and ACC, its production capacity would move up to 81.9 MTPA. This is much lower than the 120 MTPA of cement production of UltraTech Cement.

A JSW Group spokesperson declined to comment.

However, this would be higher than Shree Cement, which has a production capacity of 47.4 MTPA (including in the UAE) and Dalmia Cement (Bharat) with a manufacturing capacity of 35.9 MTPA across 14 plants in the country.

Adani Group was planning to mark its foray into the cement sector. If Adani Cement succeeds in buying ACC and Ambuja, it could start its cement foray with 65.9 MTPA, which is the combined capacity of ACC and Ambuja.

At the Vibrant Gujarat Global Summit in Gandhinagar in January 2019, Adani Group chairman Gautam Adani announced investments worth Rs 55,000 crore, which would be used to set up a 1 million tonne of copper smelting and refining project, a cement and clinker manufacturing unit in Lakhpat.

Previous reports also mentioned that Adani Group was planning to set up a 5 MTPA cement manufacturing facility in Raigad district of Maharashtra with an estimated investment of Rs 1,000 crore.

The market cap of ACC was at Rs 41,447.47 crore and that of Ambuja stood at `73,349.73 crore. The combined market cap of the firms stood at Rs 1.15 trillion, and a possible acquisition of Holcim’s businesses would make it one of the largest corporate deals in the country.

Walmart’s $16-billion acquisition of Flipkart Online Services in 2018 is still the largest, followed by BP Plc’s 30% stake buy in Reliance Industries’ oil and gas blocks for $7.2 billion in 2011.