NEW DELHI: Gautam Adani-owned Adani Group is all set to enter the cement sector. The company in a stock exchange filing has said that it has incorporated a wholly- owned subsidiary called Adani Cement Industries Limited (ACIL) on 11 June 2021.
The Gujarat-based company has been incorporated with an authorised capital of Rs 10 lakh and paid-up capital of Rs 5 lakh.
The company is yet to start its operations. As per the stock exchange filing ACIL will be in the business as manufacturers, producers, processors of all types of cements.
India is the world’s second largest cement producer and consumer with a total production capacity of 540 million tonnes per annum (MTPA) in 2020.
It has large players like Ultra Tech, Shree Cement, Ambuja Cement, ACC and a whole host of regional cement players.
Despite a 0-12 per cent slowdown in demand in 2020, and a likely 5-6 per cent correction in 2021 due to covid-related restrictions on economic activities, the sector outlook is robust given the government’s focus on large-scale infrastructure projects and affordable housing.
“We remain bullish on the sector’s prospects, given the presence of demand and margin tailwinds. We expect demand to accelerate in FY22 onwards, boosting utilisation and pricing power,” says a recent HDFC Securities report.
Adani Group owns a range of businesses including port, power, airports, edible oil as well as gas and electricity distribution.
Over the last couple of years, the group has been on an acquisition spree consolidating its position in respective sectors be it power, ports, gas and electricity distribution, airports, etc.
Experts say Adani’s entry might see consolidation in the sector, and given the past record of Adani group in other sectors, it might like to grow inorganically by acquiring regional cement players.
Meanwhile, responding to media reports that it is planning to hive off its airport business and go for listing of the airport business, Adani group has said that as of now there is no such development.