Ambuja Cements Merger Lifts Stock, Giving Investors a Unified Cement Platform

Shares of Ambuja Cements jumped after the company announced that its board has approved a merger that will bring ACC and Orient Cement into Ambuja. The goal is to create a single, simpler cement business under the Adani Group.

How the share swap works

Investors will exchange their existing shares for Ambuja shares as follows:

• For every 100 shares of ACC (face value ₹10), shareholders receive 328 Ambuja shares (face value ₹2).
• For every 100 shares of Orient Cement (face value ₹1), shareholders receive 33 Ambuja shares (face value ₹2).

The ACC exchange rate is roughly equal to its current market value, while Orient Cement gets about a 9% premium.

What brokers are saying

• Motilal Oswal keeps a “Buy” rating on Ambuja with a target price of ₹750, implying around 39% upside. They note the merger will improve earnings per share even after a modest 12% dilution and reduce the promoter’s stake from 67.65% to about 60.94%.
• JM Financial also rates Ambuja “Buy” with a ₹700 target. They say the deal is neutral for ACC shareholders and gives Orient shareholders a 9% premium. The simplification should boost governance and transparency.
• Antique Stock Broking maintains a “Buy” view with a ₹690 target, expecting cost savings of roughly ₹100 per tonne and a 13% annual growth in combined volume through FY28.

Why the merger matters

Putting ACC and Orient under one roof aims to:

• Streamline operations and cut overlapping costs.
• Provide a clearer, single brand for investors.
• Potentially improve profit margins as the larger platform gains scale.

Potential upside for investors

The combined entity, sometimes referred to as ACEM, could trade at a higher multiple than ACC does today, offering a valuation boost. Cost efficiencies and stronger pricing power may also lift earnings over the next few years.

Disclaimer

These views are based on publicly available information and analyst opinions. They are not a guarantee of future performance. Always do your own research and consider your risk tolerance before making any investment decisions.