Dalmia Bharat - Forays Into Central India Through Acquisitions: Motilal Oswal

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Motilal Oswal Report

Dalmia Bharat Ltd. has entered into a binding framework agreement with JP group for the acquisition of clinker, cement, and power plants from Jaiprakash Associates and its associate company.

Dalmia Bharat is set to acquire clinker/cement/coal based captive power plants capacity of 6.7 million tonnes per annum/9.4 mtpa/280 mega watt, respectively, at an enterprise value to Rs 56.7 billion (translates into $73/tonne).

The management had earlier indicated its aim to reach a grinding capacity of 70-75 mtpa by FY27E. The completion of this acquisition will enable the company to enter into central India with material capacity share of ~10% (on current installed capacities in central India) and one step forward toward becoming a pan-India player.

The acquisition is subject to due-diligence, requisite approvals from lenders /joint venture partners of JPA, and regulatory authorities. As such the management has not guided for any timeline for the completion of the transaction.

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