Indian billionaire Gautam Adani and his family invested $799 million to boost their stake in Ambuja Cements Ltd., in a sign of confidence that the cement maker is well-positioned to benefit from the country's infrastructure boom.
The capital infusion will bolster the Adani family's holdings by 3.6% to 66.7% and help Ambuja reach an annual cement production capacity of 140 million tonnes by 2028, according to a company statement filed on Thursday.
Cement is a increasingly crucial resource as Prime Minister Narendra Modi pushes to modernize India's infrastructure, while demand for real estate in the world's most populous country grows.
The latest Adani investment comes through Harmonia Trade and Investment, a family-owned entity that acquired over 477 million convertible warrants from Ambuja Cements for 50 billion rupees in October 2022 "- at 25% of the issuing price. Harmonia has now chosen to convert 212 million of the warrants into Ambuja shares in exchange for shares at a price of 416.87 per share.
Adani bought a controlling stake in Ambuja Cements Ltd. and ACC Ltd for $10.5 billion in 2022 in a deal financed by loans from global banks. The loans were refinanced last year by Barclays Bank Plc, Deutsche Bank AG and Standard Chartered Plc after the company recovered from a scathing attack from US-based short-seller Hindenburg Research.
The short-seller's bombshell report, which accused the group of fraud and "brazen" stock price manipulation, wiped out over $100 billion in value at one point.
Adani's ports-to-power conglomerate has not only bounced back but is flexing renewed confidence. The group has raised billions in fresh equity from sovereign wealth funds and private equity investors like GQG Partners LLC and Qatar Investment Authority, while retail investors have piled into the group's stocks. The group's combined market value stands at $188 billion compared to a low of $82 billion in February last year.
"This infusion of funds provides Ambuja capital flexibility for fast-tracked growth, capital management initiatives and best-in-class balance sheet strength," said Ajay Kapur, chief executive officer at Ambuja Cements Ltd.
