100:328 + 100:33 Shares Exchange Ratio By Adani: Buy Ambuja Cements Stock Before ACC-Orient Cement Merger?

Adani Group has just intensified the competition in cement sector of India. The Gautam Adani-backed conglomerate approved two separate schemes of amalgamation, where ACC Limited will be merged with Orient Cement Limited. The merger will create 'One Cement Platform', and the cement flagship of Adani, Ambuja Cements is at the heart of this merger. Ambuja will issue shares to both ACC and Orient shareholders. Brokerages are bullish on the development and accordingly recommended BUY on Ambuja Cements.

Ambuja Cements - ACC - Orient Cement Merger:

According to the filing, for every 100 equity shares of ACC with a face value of Rs. 10/- each, Ambuja will issue 328 equity shares with a face value of Rs. 2/- each, to eligible shareholders of ACC. Hence, the exchange ratio is 100:328.

Further, for every 100 equity shares of Orient Cement with a face value of Re. 1/- each, Ambuja Cements will issue 33 equity shares with a face value of Rs. 2/- each, to eligible shareholders of Orient Cement. The exchange ratio is at 100:33.

For ACC, the appointed date is January 1, 2026 and for Orient, the appointed date is May 1, 2025. The merger is subject to requisite approvals such as Shareholders, Creditors, SEBI, NCLT, etc, the transaction is expected to be completed over a period of 12 months.

In the post-era of the merger, promoters and promoter group of Ambuja will dilute its shares to 60.94% from 67.65%.

ACC-Orient Cement Merger Impact:

Adani management is predicting cost synergies of at least Rs 100/tn with aid in achieving the group's targeted cost, margin and growth objectives.

Analysts at JM Financial also highlighted that no separate MSAs will be required with ACC, Orient, Penna and Sanghi, as these entities will become integral parts of Ambuja. The elimination of MSAs and RPTs is expected to enhance transparency and governance standards. Importantly, both key brands-Ambuja and ACC-will continue to operate independently, retaining their strong product portfolios and market positioning. In addition, ACC is currently eligible for state-level incentives in various states, which are expected to continue for Ambuja for the remaining tenure of the incentive schemes.

From the merger, JM's note pointed out that Ambuja is targeting total capacity of 118mt by FY26 and 130-135mt by FY27, while recently upgraded its FY28 target to 155mt from 140mt earlier. This incremental 15mt expansion, supported by clinker, will be implemented through debottlenecking and new plant additions at a capex of ~USD 48/tn. Clinker capacity is also targeted to increase from 73mt to 81mt by FY27 and 96mt by FY28.

Also, Ambuja aims to reduce total cost/tn to Rs 4,000 by FY26 and further achieve ~5% YoY reductions over the following two years, translating to Rs 3,800/tn by FY27 and Rs 3,600-3,650/tn by FY28. Earlier, management has guided for EBITDA/tn of Rs 1,450-1,500 by FY28.

That being said, analysts at JM Financial and Axis Direct have recommended BUY on Ambuja Cements who will be the parent company of the newly merged entity.

Ambuja Cements Share Price Recommendation:

According to analysts at Axis Direct, the merger of ACC and Orient Cement with Ambuja Cement is expected to enhance operating efficiency. The consolidation will improve transparency across operations, enable better capacity utilisation, and provide a stronger platform for capacity expansion and industry consolidation.

Moreover, a unified operating structure is also likely to drive cost efficiencies, streamline procurement and logistics, and strengthen the company's competitive positioning in the cement sector. Its capacity expansion strategy remains firmly on schedule, supporting its objective of strengthening market share across key regions.

With a strong pan-India footprint, ongoing cost optimisation, and portfolio-wide integration benefits within the Adani group, the company is positioned to sustain its growth trajectory.

Hence, they said, "We maintain our BUY rating on the stock, with a target price of Rs 630/share (Earlier TP: Rs 705), implying an upside of 15% from the CMP, valuing the company at 17x FY27E EV/EBITDA."

Meanwhile, analysts at JM said, "The swap ratio with ACC largely remains at par with closing market price; while it offers a ~9% premium for minority shareholders of Orient Cement. Post-merger, both key brands-Ambuja and ACC-will continue to operate independently, retaining their strong product portfolios and market positioning in their respective markets. With no holdco discount for ACC (in our TP) and there are no material incremental merger synergies, in our view (as these are already being extracted through MSAs), the transaction appears broadly neutral to our Ambuja target price."

That said, further simplification of the group structure, along with the elimination of significant MSAs and related-party transactions, should enhance transparency and governance standards, which we view as sentimentally positive for the stock. JM's analysts added, "We maintain Buy rating on Ambuja with a target price of INR 700/sh, based on 17x Dec'27E EV/E."

Ambuja Cements Share Price:

After market hours on December 26th, Ambuja Cements share price closed at Rs 554.40 apiece on BSE, up by 1.07% with market cap of Rs 1,37,037.89 crore. In the past five sessions, Ambuja shares rallied by over 3%. YTD, they are also up by 3%.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.
New