HeidelbergCement India recently saw a significant rise in its share price, soaring by 18% on a single day. This surge was primarily attributed to reports indicating that the Adani Group is exploring the possibility of acquiring both HeidelbergCement India and Zuari Cement from its German parent company, Heidelberg Materials. The stock spiked as much as 17.95%, reaching a high of ₹257.85 on the Bombay Stock Exchange (BSE).
The trading volumes for HeidelbergCement India shares also saw a remarkable increase on October 7. Approximately 1 crore shares exchanged hands on both the BSE and NSE combined, a stark contrast to the average weekly trading volume of merely 2 lakh shares. This increase in trading activity reflects heightened investor interest, fueled by the acquisition news.
An insider report from The Economic Times revealed that Gautam Adani-led Adani Group has commenced preliminary discussions for acquiring the Indian cement operations belonging to Germany’s Heidelberg Materials. This potential acquisition aligns with the Adani Group’s aggressive expansion strategy in the Indian cement sector.
In this proposed buyout, Ambuja Cements, a subsidiary of the Adani Group, is expected to take the lead in acquiring HeidelbergCement’s India operations. The acquisition, if finalized, could be valued at around $1.2 billion or approximately ₹10,000 crore, indicating a strategic move aimed at bolstering Ambuja’s market position.
In contrast, shares of Ambuja Cements experienced a decline of over 3%. However, the Adani Group stock itself saw a modest rise of more than 1% during early morning trading on the BSE. Despite this mixed performance, the overall sentiment remains cautiously optimistic due to the potential acquisition.
Impact on Production Capacity
Should the acquisition proceed, it would significantly impact Ambuja Cements’ production capabilities. HeidelbergCement India contributes approximately 14 million tonnes of production capacity, while Zuari Cement adds another 7 million tonnes. This would enhance Ambuja’s total output, raising its existing capacity of 89 million tonnes as the Adani Group targets an ambitious goal of 140 million tonnes by 2028.
HeidelbergCement India Stock Performance
Despite the recent uptick in share prices, HeidelbergCement India has struggled to deliver substantial returns this year, with an increase of just over 3% in the past month and around 2.5% year-to-date (YTD). However, the stock has demonstrated a robust performance over the past year, gaining over 23%.
Ambuja Cements Stock Insights
On the other hand, Ambuja Cements has faced some volatility, with its stock price declining over 13% in the last three months, although it has gained more than 14% YTD. Over the past year, Ambuja Cements has provided investors with impressive returns, exceeding 36%.
Current Market Status
At 11:25 am, shares of HeidelbergCement India were trading 9.06% higher at ₹238.40, boasting a market capitalization that has crossed ₹5,402 crore on the BSE. Meanwhile, Ambuja Cements’ stock was reported at ₹601.15, reflecting a decrease of 1.44% in value. The market is closely monitoring these developments, as the potential acquisition could reshape the competitive landscape in the Indian cement industry.
