Dalmia Cement (Bharat) Ltd, a wholly owned subsidiary of Dalmia Bharat Ltd, has signed a business transfer agreement to acquire cement assets formerly held by Jaiprakash Associates Ltd (JAL). These assets were recently acquired by the Adani Group under the Insolvency and Bankruptcy Code framework. The agreement, executed on May 21, 2026, marks a significant expansion for Dalmia Bharat.
Key Acquisition Details and Valuation
The acquisition, valued at an enterprise value of Rs 2,850 crore, includes operational plants located at Rewa in Madhya Pradesh, and Churk, Chunar, and Sadwa in Uttar Pradesh. The comprehensive portfolio encompasses a cement capacity of 5.2 million tonnes per annum (MTPA), a clinker capacity of 3.3 MTPA, and 99 MW of thermal power capacity. Additionally, the deal includes dedicated railway sidings at Rewa and Chunar, alongside a common railway siding at Churk, enhancing logistical efficiency.
Strategic Benefits and Analyst Outlook
Equirus Securities has lauded the acquisition as a "good acquisition," stating it is beneficial for Dalmia Bharat as it provides access to new markets at reasonable valuations. The brokerage highlighted Dalmia's existing three limestone mines within 10-20 km proximity to the Rewa plant, with an estimated life of 8-10 years based on 80 percent clinker utilization. Equirus noted that while older kilns might be less efficient than newer designs in terms of heat and power consumption, their operational life can extend for many decades with proper maintenance and refractory replacements.
With this transaction, Dalmia Bharat's total cement capacity is projected to increase to 54.7 MTPA. Further expansion projects in Belgaum, Pune, and Kadapa are expected to push the total capacity to 66.7 MTPA by the second or third quarter of fiscal year 2028. The company anticipates completing the acquisition within two weeks, expecting commercial production from the second quarter of FY2027. Proximity to captive mines and Dalmia's cost leadership are expected to bolster EBITDA and returns.
Previous Attempts and Dispute Resolution
This is not Dalmia Cement's first attempt to acquire these assets. The company had previously signed a framework agreement with Jaiprakash Associates in December 2022 for the sale of business assets. However, that transaction fell through after JAL was admitted to insolvency proceedings. The current acquisition is also intended to resolve long-standing disputes between Dalmia Cement (Bharat) and JAL, including issues related to a long-term clinker supply agreement and pending arbitral awards.
Funding and Regulatory Outlook
Dalmia Bharat is expected to fund this acquisition through a combination of debt and internal accruals. Equirus believes that clearance from the Competition Commission of India (CCI) will not pose an issue, as Dalmia had previously secured approval for a similar transaction. This strategic entry into the central region marks Dalmia as the eighth player in the market, further solidifying its national presence.