Dalmia Bharat Set to Acquire JAL's Cement Assets in ₹2,850 Crore Deal Following Adani Takeover Bid
Dalmia Bharat to Acquire Cement Assets of Debt-Ridden Jaiprakash Associates
Dalmia Bharat, a leading cement manufacturer, announced on Friday that it will acquire the cement assets of debt-ridden Jaiprakash Associates through insolvency proceedings. The acquisition is expected to be completed within two weeks.
Dalmia Cement (Bharat) Ltd (DCBL), a wholly-owned subsidiary of Dalmia Bharat, has already executed a Business Transfer Agreement (BTA) with Jaiprakash Associates Ltd for the transaction. Following the takeover, Dalmia Bharat's cement capacity will increase to 54.7 million tonne per annum (MTPA).
The BTA has been signed for the acquisition of cement plants at Rewa (Madhya Pradesh), Churk, Chunar and Sadwa (Uttar Pradesh), with a cement capacity of 5.2 MTPA and clinker capacity of 3.3 MTPA, at an enterprise value of Rs 2,850 crore. The acquired assets also entail 99 MW of thermal power capacity with railway siding.
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The acquisition is expected to help Dalmia Bharat in market diversification, reducing regional volatility. The company will fund the acquisition through a mix of debt and internal accruals.
In addition to this, Dalmia Bharat's ongoing expansion projects at Belgaum, Pune and Kadapa will further augment the company's cement capacity to 66.7 MTPA by Q2-Q3 FY28.
The acquisition is a strategic fit for Dalmia Bharat, which will allow it to establish strong connections with channel partners and vendors. The company's familiarity with the assets under the earlier tolling arrangement will help in faster ramp up of capacities and quicker inroads into the market.
Jaiprakash Associates was admitted to insolvency on June 3, 2024, after the Allahabad bench of NCLT admitted a petition by ICICI Bank. The Corporate Insolvency Resolution Process against JAL was later approved by NCLT, with Adani Enterprises' Rs 14,535 crore resolution plan to take over the bankrupt flagship firm.
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| Company | Cement Capacity | Clinker Capacity | Enterprise Value (Rs crore) |
|---|---|---|---|
| Dalmia Bharat (after acquisition) | 54.7 MTPA | - | - |
| Dalmia Bharat (after expansion) | 66.7 MTPA | - | - |
| Jaiprakash Associates (acquired assets) | 5.2 MTPA | 3.3 MTPA | 2,850 |
| Adani Enterprises (resolution plan) | - | - | 14,535 |
Investor Takeaway
Dalmia Bharat's cement capacity is expected to increase following the acquisition of Jaiprakash Associates' cement assets.
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