Billionaire Gautam Adani’s Adani Group is in advanced discussions with debt-ridden Jaiprakash Power Ventures Limited to purchase its cement production facility.
The ports-to-power conglomerate might spend around Rs 5,000 crore ($606 million) for a cement grinding unit and other minor assets, according to a report by ET NOW.
The acquisition would be made by one of the cement units recently acquired by Asia’s richest person, with an announcement coming as early as this week. While conversations are progressing, they might yet be delayed or break apart, according to the report.
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The transaction will help to strengthen the Adani Group’s sudden dominance in the cement sector, which began in May when it purchased Ambuja Cements Limited and ACC Limited from Switzerland’s Holcim Limited, becoming India’s second-largest cement maker with an installed production capacity of 67.5 million tonnes per year.
The cement grinding plant has a yearly capacity of 2 million tonnes. It commenced operations in October 2014 at Nigrie, Madhya Pradesh, and has a capacity of 2 million tonnes per year.
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According to a stock market filing Monday, Jaiprakash Associates’ board of directors has agreed to divest the company’s “significant” cement business in order to reduce debt. Separately, Jaiprakash Power Ventures announced that its board is considering selling the Nigrie cement grinding business, as well as other non-core assets.
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Adani Group is looking to expand its cement, ports, green energy, and fast-moving consumer goods businesses and will raise $10 billion for the same. The conglomerate said last month that it wants to increase its cement production capacity to 140 million tonnes in five years and to invest 200 billion rupees in its recently acquired cement business.
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On Monday, Adani Enterprises’ stock ended in the red at Rs 3,253. The share price has surged nearly 60% in the past six months and over 111% in the past year.