India's Adani boosts cement heft with $295 mln deal for Sanghi

BENGALURU, Aug 3 (Reuters) - Indian billionaire Gautam Adanis Ambuja Cements (ABUJ.NS) said it would buy a near 83% stake in smaller rival Sanghi Industries (SNGI.NS) for up to $295 million, his groups first major purchase since turmoil sparked by a U.S. short sellers report.

Adani Groups fortunes rose in recent years after it made a series of acquisitions and expanded in sectors ranging from airports to ports to cement.

But Hindenburg Researchs report in January alleging wrongdoing at Adani Group battered its shares and sparked investigations, even though the conglomerate called the report baseless.

Adani Group-controlled Ambuja said on Thursday it would buy a 56.74% stake in Sanghi for 16.74 billion rupees ($202.46 million), and then launch an open offer for a further 26% stake at 114.22 rupees per share. That price is at a 13.8% premium to Sanghis closing price on Wednesday.

Reuters reported Adani Groups closure of the Sanghi deal late on Tuesday.

Adani Group entered the cement sector last year with a $10.5 billion deal to buy Indias Ambuja and ACC from Swiss giant Holcim (HOLN.S).

Sanghi has one plant with a capacity of 6.1 million metric tons per annum (MTPA), and will add to more than a dozen plants operated by Adani Group, which has total annual cement production of 67.5 MTPA.

Adani Groups combined cement capacity is forecast at 101 MTPA by 2025, well behind Indian market leader UltraTechs (ULTC.NS) capacity of about 138 MTPA.

The Sanghi deal will help Adani Group reach its goal of 140 MTPA of cement manufacturing capacity ahead of its 2028 target, the company said.

Sanghis shares, which rallied over the last few days on media reports a deal was brewing, were up nearly 5% at 105.40 rupees. Ambujas shares were up 3%.

The deal comes amid booming cement demand as the Indian government has increased infrastructure projects, as well as strong residential home sales. The cement sector grew 9.4% in June.

The Hindenburg report had sparked a confidence crisis and raised concerns about high debt levels at Adani Group. But investors such as Australia-listed investment firm GQG Partners plowed funds into the conglomerate as it repaid debt.

($1 = 82.6850 Indian rupees)