Adani Group in Talks to Acquire Heidelberg's Indian Cement Unit for $1.2 Billion

• The Indian stock market witnessed significant volatility on Monday, October 7, as the Sensex dropped 1,088 points from its intraday high due to widespread selling pressure. Both the Sensex and Nifty 50 have been in the red for six consecutive sessions, losing over 5% each.

• The decline is primarily attributed to substantial outflows from foreign portfolio investors (FPIs), who are shifting their focus to China. This shift is fuelled by China’s recent economic support measures and more appealing valuations compared to the high premiums in India.

• Consequently, Chinese markets have posted remarkable gains, with the Shanghai Composite Index jumping 21% and the Hang Seng Index rising more than 15% over the past week.

• In addition to FPI outflows, the market downturn has been further exacerbated by geopolitical tensions and the exit poll results of the Haryana and Jammu & Kashmir elections, contributing to the ongoing weak performance.

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• The stock rose 1.7% after the lender reported strong loan and deposit growth for the July-September quarter, pushing its shares up 3% during trading.

• Total deposits increased by 12.7% year-on-year to ₹1.1 lakh crore, while CASA deposits grew by 10.9%.

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• The telco's shares fell by more than 6% after reports emerged that the Department of Telecommunications (DoT) had issued a notice over the non-payment of bank guarantees needed to secure past spectrum auction dues.

• India has instructed banks to refrain from making large bets against the rupee, according to Reuters. (RT)

• Jio is urging TRAI to revise the satcom pricing paper to ensure a level playing field. (ET)

• The Tax Department is seeking public suggestions for the review of the Income Tax Act. (ET)

• A DBS Bank economist predicts the RBI will be less hawkish in the October policy meeting. (ET)

Adani Group in Talks to Acquire Heidelberg's Indian Cement Unit for $1.2 Billion

This is one of several deals in the Indian cement sector in the past 2 years. The following timeline outlines key M&A deals since Adani Group’s acquisition of Ambuja:

1. Adani Group acquires Ambuja Cement & ACC – $10.5 billion (May 2022)

2. Dalmia Bharat acquires Jaiprakash Associates – $687 million (Dec 2022)

3. Sagar Cements acquires Andhra Cements – $9.2 billion (Feb 2023)

4. Ambuja Cements acquires 83% of Sanghi Industries – $295 million (Aug 2023)

5. UltraTech acquires Kesoram Industries assets – $645 million (Nov 2023)

6. Ambuja Cements acquires Penna Cement – $1.25 billion (June 2024)

7. UltraTech acquires India Cements – $472 million (July 2024)

The cement sector is projected to grow at a CAGR of 5.51% until 2030 (Source: NCCBM). Recent reports from Centrum forecast a growth rate of 5% for FY25, despite a contraction in Q2, with anticipated price hikes expected to revive demand in H2 FY25.

• Hero Motors has withdrawn its Rs 900 crore ($106Mn) DRHP for the public issue. (MC)

• Garuda Construction raised Rs 75 crore ($8.9Mn) via anchor book ahead of its IPO. (MC)

This week’s mainboard IPO schedule

• Garuda Construction and Engineering

  • Offering Period: 08 October - 10 October, 2024

  • Listing Date: 15 October, 2024

  • Issue Price: 92-95

  • Lot Size: 157

M&A / Investments

• Adani is in discussions to acquire Heidelberg’s Indian cement unit for Rs 10,000 crore ($1.2Bn). (BS)

• Vama Sundari Investments has acquired a 100% stake in HDFC Education for Rs 192 crore ($22.8Mn). (Mint)

Debt

• IFC and Axis Bank have partnered to provide a Rs 4,200 crore ($500Mn) blue finance loan aimed at enhancing green projects in India. (Mint)

• Evonith Steel has raised Rs 1,700 crore ($202Mn) to repay bondholders. (ET)

VC

• Northern Arc launched the Finserv AIF Fund with a Rs 1,500 crore ($178Mn) target, focusing on six sectors. (YS)

• LC Nueva Investment Partners has launched its second VC fund with a target corpus of Rs 250 crore ($29.7Mn). (YS)

• D2C Insider has launched the Super Angels Fund with a corpus of Rs 25 crore ($2.97Mn). (EN)