NCLAT issues notice to Ambuja Cements on plea of Sanghi Cement’s former promoter

New Delhi: The National Company Law Appellate Tribunal (NCLAT) has issued a notice to Ambuja Cements Ltd (ACL), an entity of the Adani Group, in response to a plea filed by Alok Sanghi, the former promoter of Sanghi Industries Ltd, which is now a subsidiary of ACL

Sanghi had challenged the National Company Law Tribunal (NCLT) Ahmedabad’s order on 25 February, which initiated insolvency proceedings against him as a personal guarantor for a default amounting to approximately ₹843 crore.

The NCLT had appointed Sumit Ranjkanth as the interim resolution professional (IRP) and directed him to investigate the claims made by Ambuja Cements and submit a report within ten days.

On 4 March, the NCLAT bench, led by chairperson Ashok Bhushan, provided interim relief to Sanghi by barring the appointed IRP from taking any further steps until the case is heard again.

The next hearing is scheduled for 14 April.

The Ahmedabad insolvency court had admitted Ambuja Cement’s plea, stating that Alok Sanghi had personally guaranteed the liabilities of Sanghi Industries but failed to fulfill his obligations when the company defaulted.

What happened earlier

In August 2023, Ambuja Cements entered into a share purchase agreement to acquire Sanghi Industries from its shareholders, including promoter Alok Sanghi. As part of the deal, Sanghi and other sellers provided warranties, indemnities, and a personal guarantee to cover Sanghi Industries’s financial obligations.

One significant liability arose from unpaid electricity duty under the Gujarat Electricity Duty Act, 1958. On 6 December, 2023, the Gujarat government issued a demand notice to Sanghi Industries for ₹2,788 crore in unpaid dues dating back to 2007, which was later revised to ₹1,619.5 crore in July 2024.

Sanghi Industries challenged the demand in the Gujarat high court, but in November 2024, the tax department upheld the dues and ordered payment. Since Sanghi Industries failed to clear its liabilities, Ambuja Cements invoked Sanghi’s personal guarantee and demanded ₹843 crore in December 2024 after making necessary adjustments.

According to Ambuja Cements, despite receiving legal notices, Sanghi neither paid the amount nor provided a resolution, prompting it to file an insolvency petition against him on 6 February, 2025. The NCLT admitted the plea, appointed Sumit Ranjkanth as the IRP, and directed him to submit a report within ten days.

Personal insolvency provisions under the Insolvency and Bankruptcy Code (IBC) were introduced in 2019 to address individual insolvencies, including those of personal guarantors. Covered in Sections 94 to 120, the process allows debtors or creditors to apply for insolvency resolution. Upon application, an interim resolution professional is appointed to assess the debtor’s financial situation and submit a report to the adjudicating authority within ten days, recommending acceptance or rejection of the application.

Also Read: Adani Cement started off with acquisitions. Here comes Part 2.

Ambuja Cements’ acquisition of Sanghi Industries

In December 2023, Ambuja Cements completed the acquisition of Sanghi Industries at an enterprise value of ₹5,185 crore, acquiring a 54.51% voting share in Sanghi Industries from its promoters. This acquisition increased Ambuja’s capacity to 74.6 million tonnes per annum (mtpa). The company plans to further increase capacity to around 100-110 mtpa by FY26/FY27.

In December 2024, Ambuja Cement announced a transformative move to merge Sanghi Industries and Penna Cement Industries into its operations.

The Adani Group entered the cement sector in September 2022 after acquiring controlling stakes in Ambuja Cements from Swiss firm Holcim for $6.4 billion (approximately ₹51,000 crore). Ambuja Cements owns a 51% stake in ACC Ltd. The group later launched a ₹31,000 crore open offer to acquire an additional 26% stake from public shareholders.

Following its entry into the sector, the Adani Group has been aggressively expanding its cement production capacity.

In October 2024, the group announced the acquisition of CK Birla Group’s Orient Cement for ₹8,100 crore. With this acquisition, Adani Cement is expected to achieve a production capacity of 100 mtpa by the end of FY25, gaining a 2% increase in the overall market share.

The company aims to expand its cement production capacity to 140 mtpa by FY28. It competes with UltraTech Cement Ltd, an Aditya Birla Group company, which currently leads the industry with a consolidated grey cement capacity of 156.66 mtpa.