Adani’s cement giant in the making – who wins and who loses?

Ambuja and Orient have outperformed the broad market index, with 18% and 15% CAGR, respectively, over the last five years. The proposed simplification of organizational structure across Adani’s cement companies should unlock further value for shareholders.The merger ratios approved by the Ambuja board will accord 328 shares of Ambuja Cements for every 100 ACC shares.

Against every 100 shares of Orient Cement, shareholders will receive 33 shares of Ambuja. The merger ratios reflect the relative ownership that ACC and Orient shareholders will receive in Ambuja after the consolidation.On the day of the announcement, the stock of Orient Cement closed at ₹163.52, and that of Ambuja Cements at ₹539.95.

If the approved merger ratios are applied to the stock prices prevailing on 22 December, it translates into Orient being valued at a 9% premium to its market price.Against ₹16,352 worth of Orient shares, shareholders stand to get Ambuja shares amounting to ₹17,818. Even as ICICI Securities’ calculations show that this is a discount compared to where Orient was valued in 2024 when Adani had acquired it from the Birla group, Orient shareholders celebrated the development.

Its stock has gained 5% since 22 December.ACC shareholders have not been as fortunate. Weighed down by master-supply agreements (MSAs) with group companies, ACC’s profitability has been volatile.

Despite remaining flat over the last five years, the share-swap ratios valued it a discount to its market-price on 22 December.Based on ACC’s closing price of ₹1,782.5 apiece, ACC shareholders would receive ₹1,77,104 worth of Ambuja Cements for ACC shares amounting to ₹1,78,250. The valuation is also at a steep discount compared to how much Adani had paid to acquire it