Adani family infuses ₹8,339 cr more in Ambuja Cements; stake up at 70%
DATA FOCUS.
The Adani promoter family has infused ₹8,339 crore more into Ambuja Cements, by fully subscribing to the warrants issued by the company and raising promoter stake to 70.3 per cent from 63.2 per cent.
This takes the total fund infusion to ₹20,000 crore, with the earlier investment of ₹5,000 crore in 2022 and ₹6,661 crore in March this year. The funds will be used by the cement companies to double annual production capacity to 140 million tonnes (mt) by 2028.
With this, promoters have further strengthened Ambuja post acquisition, giving capital flexibility for accelerated growth, capital management
initiatives and best-in-class balance sheet strength to accomplish its various strategic initiatives, a company release said.
USE OF FUNDS
Apart from the capacity expansion, the funds will also be used to debottleneck production to boost operational performance, and bring in e¨ciencies across resources and supply chain.
Barclays Bank PLC, MUFG Bank, Mizuho Bank and Standard Chartered Bank acted as advisor for the transaction.
Ambuja Cements is expanding both organically as well as inorganically. On Monday, it announced buying a 1.5-mtpa cement grinding unit in Tuticorin for ₹414 crore from My Home Group. The total cement capacity of the Adani Group is around 79 mt now.
The BJP tells voters they have managed to bring India from the “fragile 5 to top 5 economies” and will continue their current growth policies to make it the third largest economy. The Congress says NDA’s legacy is that of ‘jobless’ growth and the grand old party, if voted to power, will double India’s GDP in the next 10 years, and reinvent the economy, as it did in 1991.
With the IMF forecasting 6.8 per cent growth for India in 2024 and the UK and Japan estimated to clock less than 1 per cent growth, the third largest economy tag is not too far away and BJP’s promise can be projected to be achieved by 2027. Similarly, between 2014 and 2024, despite Covid, India more than doubled its nominal GDP from around ₹100lakh crore to ₹260-lakh crore. Thus, the Congress’ declaration of doubling the GDP in the next 10 years seems achievable.
FOCAL POINTS
While the BJP’s manifesto highlights GST, the Make-inIndia scheme and Productionlinked Incentive (PLI) among its key wins, Congress says it will focus on the twin challenges facing India – unemployment and inflation. Interestingly, the word ‘unemployment’ does not feature in the BJP’s manifesto, but the party commits to leverage infrastructure projects and the manufacturing sector to achieve growth and employment goals. However, with automation playing a key role in manufacturing, the sector is not as labour-intensive as it used to be. The Congress’ manifesto sets a specific target to raise the share of manufacturing from 14 per cent to 20 per cent of GDP in the next five years. With the share of manufacturing in GDP stagnating post-pandemic, this looks to be a tall ask.
On the taxes and compliance front, both parties agree that the framework needs a revisit, but the Congress is calling for a complete overhaul of the taxation system. During the NDA’s 10 years, the tax base increased, but the tax-toGDP ratio did not see a large rise. With the Congress making a promise to keep personal income-tax stable and coupled with the party’s commitment to revamp GST and Central Government cess, tax revenue will likely be impacted.
Radhika Rao, senior economist at DBS, said in a note the BJP’s manifesto lacks a push towards more “contentious structural reforms (land, labour, farming, etc.), “but these could be prioritised if the party returns for a third term”.
“On the other hand, implementing the Congress’ social welfare and populist measures will entail significant fiscal costs, necessitating subsequent revenue-enhancing measures,” she added.