CCI Clears Dalmia's Proposed Jaiprakash Buyout

The Competition Commission of India (CCI) has approved Dalmia Cement's acquisition of cement, clinker, and power plants of Jaiprakash Associates Limited (JAL) for an enterprise value of ₹5,666 crore. The transaction, once approved by all regulators, would result in Jaiprakash Associates exiting the cement business completely. The plants being sold under the deal are located in Madhya Pradesh, Uttar Pradesh, and Chhattisgarh, and the acquisition will enable Dalmia Cement to expand its footprint into central India, becoming a pan-India company with a capacity of 75 million tonnes by FY27 and 110-130 million tonnes by FY31.

Dalmia Cement is a wholly-owned subsidiary of Dalmia Bharat Limited (DBL), which has been in the cement manufacturing and sales business for over 80 years and is the ultimate parent entity of the Dalmia Bharat Group. The target assets are engaged in the manufacture and sale of clinker in India, manufacture and sale of grey cement primarily in Madhya Pradesh, Uttar Pradesh, Chhattisgarh, and coal-based thermal power generation primarily for captive consumption purposes in India.

There were reports in January that Jaiprakash Associates had defaulted on loans amounting to Rs 4,059 crore, comprising both the principal and interest amount.

Reliance Cement

Reliance Infrastructure To Exit Cement Business By Selling Off Reliance Cement

Anil Ambani, head of the Anil Ambani led Reliance Group has gone on record stating that  the company would look at divesting stake in non-core businesses including cement to bring down debt.

Started in 2007, Reliance Cement is a fully-owned subsidiary of Reliance Infrastructure, part of the Anil Ambani led Reliance Group. The interest in the cement business was linked to the growth of its power business with the fly ash waste generated from the Sasan Ultra Mega Power Project being used as a basic raw material.

Reliance Cement had planned on earlier to emerge as the one of the biggest cement players in the country with the largest single location cement facility. It had initially planned to set up four cement plants of 5 MPTA cement capacity each at a massive investment outlay. All the units were to come up in Madhya Pradesh so that they could  leverage on the strengths of the Reliance Group's Sasan Ultra Mega Power Project.

The original blueprint included plans to scale up operations to 15 MTPA over the 3-5 years with integrated cement units in MP and Maharashtra.

Reliance Cement has a total installed capacity of 5.8 MPTA. Out of this 2.8 MTPA is at the mother unit based in Maihar, Madhya Pradesh that was commissioned in 2014. The rest of the cement units are in Kundaganj, Uttar Pradesh and Butiburi, Maharastra.

Reliance Cements is presently marketed in UP, MP, Jharkhand, West Bengal and in parts of Maharashtra.

Posted by Stewart D'Rozario Cement Marketing Consultant from news reports.