Adani Group targets Jaypee Group's cement assets

As lenders have initiated insolvency and bankruptcy proceedings against Jaiprakash Associates Ltd, the Adani Group is looking to acquire the Jaypee Group’s cement assets, which boast over 9Mta capacity, according to a report by Moneycontrol. 

Jaiprakash Associates has been selling its cement plants to reduce debt, with a significant portion of its cement business previously acquired by UltraTech in 2016 for over INR160,000m (US$1.9bn), adding 22.4Mta capacity to UltraTech’s portfolio. The remaining units retained by the debt-ridden group are now being eyed by the Adani Group.

On 3 June the National Company Law Tribunal (NCLT) in Allahabad admitted Jaiprakash Associates Ltd for corporate insolvency. This decision came after ICICI Bank filed an application in September 2018 for debt resolution under the Insolvency and Bankruptcy Code, 2016. The State Bank of India (SBI) also moved against JAL, claiming a total default of INR68,931.5m as of 15 September 2022. 

The Adani Group currently ranks as India’s second-largest cement producer following its acquisition of ACC and Ambuja Cements from Holcim. Led by Gautam Adani, the group has been actively growing its cement arm, with the goal of capturing one-fifth or 20 per cent of the Indian cement market by the FY27-28.

According to Moneycontrol, the insolvency proceedings, which were stagnant for nearly six years, have created an opportunity for Adani to acquire Jaiprakash’s cement and associated assets, including limestone mines and a power plant. Although plans are being developed, it is important to note that the bankruptcy proceedings are still in the early stages. The committee of creditors has only met once, on 29 June, and no formal sale process has been initiated. 

In May 2024 Jaiprakash Associates defaulted on loans worth INR46,160m, comprising a principal amount of INR17,510m and interest of INR28,650m. This default underscores the urgency of the ongoing insolvency proceedings and the potential for asset acquisition.

The potential acquisition is expected to intensify competition in the rapidly consolidating cement industry. Major players like UltraTech, Adani, Dalmia, and JSW Cement are actively seeking assets across the country.