Manufacturing facilities of Deccan Cements are located near the second largest city in Vijayawada, Andhra Pradesh, while its corporate office is in Hyderabad.According to people familiar with the matter, JK Lakshmi is bidding to acquire Cement and Chettinad Cement Telangana-based Deccan Cement. According to a report by Economic timeCompanies are in a competitive race for the asset as the demand for cement increases behind the infrastructure activity led by the state in neighboring Andhra Pradesh.
Deccan Cements, which is expected to reach a production capacity of 4 million tonnes by the end of the year, demanding an enterprise value of $ 360 million (₹ 3,110 crore) or approximately $ 90 per tonne capacity, sources said.
Replacement evaluations vary in India’s regional fragmented cement industry. Greenfield expansion often costs more than $ 100 per ton. In southern India, the evaluation is usually less due to low capacity usage and pure cement attainment.
Property located near Vijayawada, sales advised by EY
Manufacturing facilities of Deccan Cements are located near the second largest city in Vijayawada, Andhra Pradesh, while its corporate office is in Hyderabad. Sources said that the company has led the company by Parvati Penmech and is engaged in EY to give advice on sale.
Bid’s interest in Andhra Pradesh coincides with a infrastructure push, where the Center has announced projects worth ₹ 50,000 crore for the development of Amravati, the capital of the new state. The region hosts several integrated cement units.
JK Lakshmi Cement located in Delhi currently has no manufacturing appearance in Andhra Pradesh or Telangana. The headquarters of Chennai, Chettinad Cement, operates facilities in both states.
None of the companies including EYs answered ET questions before publication.
India’s cement sector has seen consolidation since FY23, led by UltraTech Cement and Adani Group. Southern India, which is about one -third of the total cement production of the country, is at the center of this trend.
Cement manufacturers across India are expanding capabilities in constant demand growth.
