The Adani Group is reportedly planning to acquire the cement assets of the beleaguered Jaypee Group, as the latter undergoes insolvency and bankruptcy proceedings.

What Happened: The Adani Group, India’s second-largest cement maker, has begun strategising to acquire Jaypee’s cement assets, which exceed 9 million tonnes per annum, according to a report by Moneycontrol.

The insolvency proceedings against Jaypee were initiated in early June, nearly six years after lender ICICI Bank had filed an application. Following this, the National Company Law Tribunal (NCLT) admitted Jaiprakash Associates, Jaypee Group’s flagship firm, for corporate insolvency. 

The commencement of insolvency proceedings has reportedly given Adani the opportunity to acquire Jaypee’s cement and associated assets, such as limestone mines and a power plant. However, the report also said the bankruptcy proceedings were still in the early stages, with no formal sale process for Jaiprakash Associates’ assets initiated as of now.

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The insolvency proceedings are expected to intensify competition in the rapidly consolidating cement industry, with major players like UltraTech, Adani, Dalmia and JSW Cement vying for assets across the country. 

In 2022, Dalmia Bharat signed a deal to acquire Jaypee’s cement and power assets for an enterprise value of ₹ 5,666 crore. The deal has not been closed yet due to pending approvals from Jaiprakash Associates’ lenders and an ongoing arbitration between Jaiprakash and UltraTech Cement. 

Meanwhile, UltraTech is in advanced discussions to acquire Orient Cement, indicating the aggressive expansion strategies of cement companies in India. The potential acquisition of Jaypee’s assets by Adani Group is in line with this trend.

Price Action: Shares of Adani Enterprises were up 0.78% at ₹3,114.55 on Tuesday morning.

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