Ambuja Cements Shares Rise as ACC & Orient Merge – Impact for Investors

Ambuja Cements’ shares edged higher on Wednesday, reacting to the board’s green light for a merger with ACC and Orient Cement.

Share price movement

The stock opened around Rs 550.7, up 0.7% from the previous close. It has risen 1.3% the day before and is up about 2.3% year‑to‑date.

What the merger involves

The company plans to combine ACC and Orient Cement into Ambuja Cements. The deal still needs approval from shareholders, the National Company Law Tribunal and other regulators, and could be completed within the next 12 months.

Management says the consolidation will create a pan‑India cement platform, streamline manufacturing and logistics, simplify the corporate structure and allow better use of capital to grow margins.

Brokerage views

• HSBC keeps a “Buy” rating with a target of Rs 700 per share, citing cost‑saving synergies.
• Macquarie rates the stock “Outperform” with a Rs 608 target, highlighting a simpler structure but noting risks like weak demand and pricing pressure.
• Citi maintains a “Buy” call, setting a Rs 625 target. It sees a Rs 100 per tonne cost reduction already baked into Ambuja’s plans and expects the ACC and Ambuja brands to stay separate.
• Other brokers such as CLSA and Morgan Stanley also view the merger as a way to remove complexity and unlock efficiency over time.

Key takeaways for investors

• The merger aims to deliver at least Rs 100 per tonne in cost savings.
• Broker targets range from Rs 608 to Rs 700, suggesting upside potential.
• Execution risks include getting ACC shareholder approval, managing the ACC brand post‑merger, and overall cement demand.
• The exact record date for the share‑swap eligibility has not been announced yet.

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