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

Ambuja Cements shares were trading in the red in a weak market on March 13 despite the Adani Group pre-paying a $500-million loan for the Ambuja deal. However, Shares of Adani Enterprises surged nearly 3 per cent to Rs 1,985 apiece on the BSE in Monday’s opening deals after the Group said it has fully prepaid share-backed financing worth $2,15 billion. Adani Power, Adani Green Energy, Adani Total Gas and Adani Transmission continued to surge to hit the upper circuit level of 5 per cent.

The group said it has completed the entire prepayment of margin-linked share-backed financing, amounting to $2.15 billion, ahead of the committed timeline of March 31, 2023. Since the Hindenburg Research report came out on January 24, the Adani group has been focused on cutting debt in a bid to ease investor concerns.

Adani group also said prepaid the $500 million facility taken for Ambuja acquisition financing, in line with commitment to increase equity contribution. As a result, the promoters have infused $2.6 billion out of the total acquisition value of $6.6 billion for Ambuja and ACC.

Adani added that the entire prepayment programme was completed within six weeks, which “testifies the strong liquidity management and access to capital at sponsor level, supplementing the solid capital prudency adopted at all portfolio companies”.

In a $10.5-billion deal, Adani Group picked up Holcim Group’s entire stake in two Indian firms — Ambuja Cements and ACC. It was the largest-ever acquisition by Adani, and India’s largest-ever M&A transaction in the infrastructure and materials space.

Holcim sold its 63.19 per cent stake in Ambuja Cements Ltd and 54.53 per cent in ACC (of which 50.05 per cent is held through Ambuja Cements) to Adani Group.

Earlier, Moody’s Investors Service said that India would see strong demand for cement in FY23 and FY24. Cement production in India is estimated to grow by around 6-8 percent over fiscal years 2023 and 2024, following a 21 percent jump for the fiscal year ended March 2022, according to a report by Moody.

The ratings agency believes that India’s infrastructure-led investments, mass residential projects and broad-based economic growth will keep cement demand solid.

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