valuation

Consolidation in the cement industry continues, with Adani-owned Ambuja Cements announcing a 100 per cent acquisition of Hyderabad-based Penna Cements Industries Limited (PCIL) for an Enterprise value of ₹10,422 crore. With an operational and to be commercialised capacity of 14 million tonnes per annum (mtpa), the PCIL deal is valued at $89 per tonne, which is marginally below the replacement cost of $90-100 per tonne for similar capacities. Ambuja can increase its Southern market share with the deal, which can be value-accretive if the expansion pans out.

Buoyant markets tend to work favourably for those players that are part of the ecosystem.  Brokerages, asset and wealth management companies and even private equity/investment players tend to be beneficiaries when markets are on a bull run.