Adani refinances $3.7 bn loan in Ambuja, ACC deal
₹2,500 crore for Adani’s cement firms every year. “The tenure of the refinance will be 36 months," said the first person. Alongside, Ambuja Cements and ACC together generate around $1 billion in cash every year.
“These two factors together will help Adani Group in its mega-inorganic growth plan," said the first person. In August, Adani Group-owned Ambuja Cements acquired a 56.74% stake in Gujarat-based cement-maker Sanghi Industries Ltd, valuing the latter at ₹5,000 crore. “After the refinance deal, Adani Group may acquire another mid-size cement-making firm in the next six-nine months which will increase the existing capacity of its cements business to close to 100mtpa," said the first person.
On 4 October, a report by The Hindu Business Line said Adani Cement may join the race along with Parth Jindal-led JSW Cement to acquire Heidelberg Cement India, which has a capacity of 14 mtpa. JP Morgan India Pvt. Ltd on 2 August said in a report that Adani has estimated a 17% sales volume CAGR in the 2023-28 period.
“While the vision and growth targets are impressive, the reduction in cash balances at ACC-Ambuja Cements, and the acquisition debt at the parent holding company, means that how ACC-Ambuja Cements would fund the aggressive capex needs to be seen," the report said. Since the latest refinance deal will bring a large part of Adani group’s overall debt under a lower rate regime, the group’s overall credit-worthiness and the leverage ratio may improve, said the second person, adding that at least 40% of the cement manufacturing process by Ambuja Cements and ACC will be ESG compliant and non-clinker dependent, which may further enhance the two cement firms’ credit rating. “….the large order placement (by Ambuja Cements) is
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