Adani Group-owned Ambuja Cements is doubling its cement empire. On Tuesday, the company announced the merger of its subsidiaries Sanghi Industries and Penna Cement Industries in its fold, with the aim of streamlining operations and consolidating its position in the market.

Under the proposed scheme with Sanghi Industries, shareholders will get 12 shares of Ambuja Cements for every 100 shares of Sanghi they hold. Ambuja, already the developer with a 58.08% stake in Sanghi, is looking to fully integrate the business to drive efficiency and growth.

The move comes as Ambuja Cements aims for a sharp increase in production capacity. After the merger, Ambuja’s capacity is expected to exceed 100 million tonnes per annum (MTPA) by the end of the fiscal year. It currently produces 89 MTPA, with an ambitious roadmap to reach 140 MTPA by 2027-28.

Ajay Kapur, managing director of Adani Group’s cement business, called the merger a strategic leap forward: “This merger aims to make our company more competitive and efficient, ultimately improving value for shareholders. Improved working capital management and internal funds will support the growth of our business operations.”

Sanghi Industries brings significant firepower to the table, including India’s largest single-site cement and clinker unit at Sanghipuram, Gujarat, with a clinker capacity of 6.6 MTPA and limestone reserves of 1,000 million tons. The site’s integrated dock and captive power plant further strengthen its operational advantage.

Penna Cement adds scale to South India, with four integrated plants in Andhra Pradesh and Telangana and a grinding unit in Maharashtra. It operates at a capacity of 10 MTPA, with two additional plants under construction at Krishnapatnam and Jodhpur, each set to add 2 MTPA within a year.

Ambuja believes the consolidation will simplify compliance, unlock cost efficiencies and unify cash flow management for faster expansion.

Shares of Ambuja Cements fell nearly 1% to close at ₹571.50 on the NSE on Tuesday.