HeidelbergCement India Up 18%; Ambuja To Buy Co’s Domestic Operations

Following reports of Ambuja Cements’ foray into HiedelburgCements India’s domestic operation, the stock price of HeidelbergCement India surged past 18% to ₹257.85 on Monday’s trading session on BSE. Ambuja Cements is set to invest ₹10,000 cr for 14 million tonnes per annum.

Notably, the stock traded at its highest level since October 2021. It hit its record high at ₹300 in 1992.

With a 20-fold jump in its trading volumes, HeidelbergCement India zoomed past 14% on NSE at ₹249.32 as compared to 0.26% increase on BSE at 9:46 AM.

Till the time of press, 7.16 million equity shares exchanged hands on NSE and BSE that represented 10.32% stake in the company. This represents the percentage of shares available for trading in the market.

As per Economic Times report, Adani group via its subsidiary company Ambuja Cements will lead the buyout of Heidelberg’s India unit, which is valued at $1.2 billion (₹10,000 crore)

Founded in 1874, Heidelberg Materials, the parent company of HeidelbergCement India, is engaged in the production and distribution of cement, aggregates, ready-mixed concrete and asphalt that is used in the construction of houses, infrastructure and commercial and industrial facilities. HeidelbergCement India houses its operations in Madhya Pradesh, Uttar Pradesh and Karnataka in the country.

As per ICICI Securities, Ambuja Cement’s total capacity stands at 89 mtpa (million tonnes per annum), in which the company is further planning to increase the capacity to 140 mtpa by ₹18,300 crore.

HeidelbergCement India Annual Report FY24

In its FY24 report, HeidelbergCement India said that it’s aiming to increase its volume with a capital outlay of ₹70 crore to widen its production in Central India.

Owing to India’s young population, further attributed to the surge in higher education and nuclear families, the demand for housing is expected to double in the next decade. Moreover, India has a housing shortage of 30 million units, which is expected to increase to 90 million units by mid 2030.

Planned outlays in projects related to railways, ports, and urban infrastructure in tier 2 and tier 3 cities will set the tone for cement demand in the country. The projects include Bharatmala (roads and highways), Tunnels & Border Roads, Roads & Expressways among various others.

The company previously affirmed a healthy demand in the construction sector on account of capital spending from businesses.