Ambuja Cements Shares Jump 4% After Merger Approval, Investors Gain

Ambuja Cements' shares rose sharply after the company announced it will merge with ACC and Orient Cement, a move that could benefit shareholders.

Merger Announcement and Share Reaction

On December 23, Ambuja Cements' stock climbed more than 4% to ₹563.50, its highest in over a month. Orient Cement also jumped nearly 10% to ₹179. Both stocks have risen for three days straight. In contrast, ACC's shares fell about 2% to ₹1,752.

Share Swap Details

• ACC shareholders will receive 328 Ambuja shares for every 100 ACC shares they own (328:100 swap ratio).
• Orient Cement shareholders will receive 33 Ambuja shares for every 100 Orient shares they own (33:100 swap ratio).

The exact record date for the swaps has not been announced yet.

Analyst Views

• Morgan Stanley kept an Overweight rating on Ambuja, with a target price of ₹650, implying >20% upside.
• CLSA expects about a 10% value boost for shareholders after the merger and rates Ambuja as Outperform with a target of ₹680.
• JPMorgan says the combined pan‑India operation should lower costs and help sell premium brands.
• Emkay views the deal as neutral‑to‑slightly negative for ACC shareholders but mildly positive for Orient investors.

What It Means for Investors

The merger aims to cut costs by at least ₹100 per tonne through operational efficiencies and to simplify the corporate structure. For Ambuja shareholders, the swap ratios are seen as neutral for ACC holders and favorable for Orient holders. Analysts anticipate that the combined entity could deliver better margins and growth, potentially lifting the stock price further.

Disclaimer

Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.