Sanghi Industries share price crashes 12% to 52-week low after THIS merger update

Adani Group stocks: Shares of Sanghi Industries crashed over 12 per cent on Wednesday, December 18 to their fresh 52-week low of ₹67.42 on the BSE. The slide can be attributed to Ambuja Cements’ announcement of the amalgamation of the company with itself. Both companies are part of Adani Group.

Ambuja Cements-Sanghi Industries Merger Details

As part of the scheme of arrangement, Ambuja Cements, who is the promoter of the company, holding 58.08 per cent stake, will issue 12 equity shares of the face value of ₹2/- each for every 100 equity shares of Sanghi Industries of face value ₹10/- each as recommended by the valuers and accepted by the Board.

Following the merger, the shareholders of Sanghi Industries will become the shareholders of Ambuja Cements.

The merger is expected to lead to more efficient and economical business management, including better resource utilisation, reduced overheads, cost savings, economies of scale, and also increase shareholders’ value.

Sanghi Industries has a clinker capacity of 6.6 MTPA, a cement capacity of 6.1 MTPA, and limestone reserves of ~1 billion tonnes. The company’s Sanghipuram plant is India’s largest single-location cement and clinker unit by capacity, with a captive jetty and captive power plant.

In December 2023, Ambuja Cements had completed the acquisition of Sanghi Industries at an enterprise value of ₹5,185 crore.

Apart from Sanghi, Ambuja Cements will also merge another subsidiary Penna Cement with itself. Penna has four integrated plants in Andhra Pradesh and Telangana, along with a grinding unit in Maharashtra. It has an operational capacity of 10 MTPA.

The transactions will come into effect following required approvals from related stakeholders and authorities. The deals are expected to be completed in 9-12 months’ time.

At 11.45 am, Sanghi Industries was trading at ₹69.14, down 10.11% while Ambuja Cements was flat at ₹568.80.

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