Explained - How the Jaiprakash assets acquisition benefits Dalmia Bharat

Dalmia Bharat Ltd. announced on Friday, May 22, that it has signed an agreement to acquire part cement assets from Jaiprakash Associates Ltd. from the Adani Group, which were acquired under the Insolvency & Bankruptcy Code (IBC).

The deal comes four years after the company had entered into a framework and business transfer agreement with Jaiprakash Associates, back in December 2022.

However, before the deal could be consummated, Jaiprakash Associates was admitted to insolvency proceedings.

Here's how the deal benefits Dalmia Bharat:

Move Towards A Pan-India Player

As per the deal, Dalmia Bharat will be acquiring plants located at Rewa in Madhya Pradesh, along with those in Churk, Chunar and Sadwa in Uttar Pradesh.

This will include a 5.2 MTPA cement capacity, 3.3 MTPA clinker capacity and 99 MW of thermal power capacity, along with a railway siding at Rewa and Chunar.

The deal helps Dalmia Bharat get access to markets in Central India and adds to the company's aim of becoming a Pan-India player.

Capacity Expansion

Dalmia Bharat has a plan to achieve capacity of 66.7 MTPA by the second or third quarter of financial year 2028, and end that financial year with a capacity of 75 MT.

With this, the overall capacity of Dalmia Bharat will move to 54.7 MTPA from the current capacity of 49.5 MTPA.

Puneet Dalmia, MD & CEO of Dalmia Bharat also said that the deal serves as a "great strategic fit" for the company.

Shares of Dalmia Bharat are still down over the last month and on a year-to-date basis.