Mumbai-listed Dalmia Bharat said Monday it has inked a binding framework agreement to acquire clinker, cement and associated power plants from debt-laden Jaiprakash Associates and its group companies at an enterprise value of Rs 5,666 crore ($686 million).
The target assets have total cement capacity of 9.4 million tonnes along with clinker capacity of 6.7 million tonnes and thermal power plants of 280 MW. These assets are situated in the states of Madhya Pradesh, Uttar Pradesh and Chhattisgarh.
Dalmia Bharat said the proposed acquisition of Jaypee Cement will enable it to expand its footprint into the central Indian region and will mark a significant step towards realization of its vision to emerge as a pan-India cement company with a capacity of 75 million tonne by FY27 and 110‐130 million tonnes by FY31.
The deal will provide Dalmia with a head-start with around 10% capacity share in the attractive central region. Dalmia Bharat said that the region has one of lowest per capita cement consumption regions in India at around 170 kg even as it represents around 15% of total demand in the country worth around 54 million tonnes.
Demand in the region is expected to grow at 7% CAGR in the medium term. The top five players in the region hold around three-fourths of the market.
The transaction is subject to due‐diligence, requisite approvals from lenders/JV partner of Jaiprakash Associates Limited and regulatory authorities.
Founded in 1939, Dalmia Bharat is one of India’s top cement companies and is headquartered in New Delhi. With a growing capacity, currently pegged at 37 million tonnes, Dalmia Bharat is the fourth‐largest cement manufacturing company in India by installed capacity, spread across 10 states and 14 manufacturing units.
This comes as another move of consolidation in the cement industry in the country. Earlier this year, Adani Group signed a deal to acquire Holcim’s India units ACC and Ambuja Cements in a multi-billion-dollar transaction.