Dalmia Bharat subsidiary, Dalmia Cement (Bharat), has signed a Business Transfer Agreement for the acquisition of cement assets owned by Jaiprakash Associates (JAL).

JAL was recently acquired by the Adani Group through an insolvency resolution process, and the total enterprise value of the deal stands at Rs 2,850 crore.

Dalmia Bharat: Transfer Agreement Key Details

As per Dalmia Bharat’s regulatory filing, DCBL executed a Business Transfer Agreement with Adani Group-acquired JAL under the Insolvency & Bankruptcy Code on May 21. Under the scope of the agreement, DCBL will take over JAL’s cement assets comprising its plants located in Madhya Pradesh and Uttar Pradesh.

The cement-manufacturing company will acquire these plants, which have a combined cement capacity of 5.2 million tonnes per annum (MnTPA) and clinker capacity of 3.3 MnTPA, at an enterprise value of Rs 2,580 crore.

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These assets also involve the acquisition of 99 MW of thermal power capacity and railway sidings at Rewa and Chunar, along with a common railway siding at Churk.

Dalmia Bharat: Cement Capacity to Increase to 54.7 MnTPA

The company, in its statement, said that the completion of this business deal will result in an increase in its cement capacity to 54.7 MnTPA.

“In addition to this, the ongoing expansion projects at Belgaum, Pune, and Kadapa will further augment the company’s cement capacity to 66.7 MnTPA by Q2~Q3 FY28. The transaction is expected to be consummated within two weeks,” Dalmia Bharat added in its regulatory filing.

The company said the acquisition of these cement assets will provide it with faster access to central markets and offer expansion opportunities, which will further help augment its EBITDA delivery and enhance overall returns.

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Dalmia Bharat – JAL: Deal History

Dalmia Bharat had entered into a framework agreement with JAL in December 2022 for the sale of business assets, including a Business Transfer Agreement and Cement Sale Purchase Agreement. However, the completion of the same could not be done as JAL was admitted to insolvency.

This agreement between DCBL and Adani Group-owned JAL is designed to settle and bring a decisive end to all disputes and differences between the companies pertaining to the ongoing legal proceedings.

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Dalmia Bharat: Management Commentary

Commenting on the acquisition, Puneet Dalmia, Managing Director & CEO – Dalmia Bharat, said, “This serves as a great strategic fit for Dalmia. It helps us move forward in our journey to be a pan-India player and provides a strong head start to serve the high-potential markets in the Central region.”

He further added that the deal will enable the company to leverage Dalmia’s strengths to help operate these assets in a manner that can maximize value creation for its stakeholders.

Dalmia Bharat Share Price

Dalmia Bharat’s stock was up nearly 2% in early trade. Over the past one month, the cement company’s share price has fallen by over 10%, while over the past six months, it has declined by nearly 12%.

So far this year, the stock has fallen by more than 16%.