Ambuja Cements, India's No.2 cement maker, said on Tuesday it would buy a nearly 47% stake in rival Orient Cement for 37.91 billion rupees ($451 million), but analysts raised doubts about the deal winning regulatory approval.

The latest acquisition will add 16.6 MTPA (million tonne per annum) capacity to Adani Cement, which operates through Ambuja Cements in the sector.

Ambuja’s acquisition of a significant stake in Orient Cement is a strategic bet on India’s growth story, but with earnings under pressure, the challenge now lies in making the premium payout deliver returns.

India's Ambuja Cements said on Tuesday it would acquire a 46.8% stake in Orient Cement, valuing the company at 81 billion rupees ($963.5 million). The Adani-owned cement maker will buy the Telangana-based company's shares at 395.

The deal will also provide Ambuja Cements potential additional capacity of 6 MTPA in North India, leveraging Orient Cement's high quality limestone reserves in Rajasthan.

Ambuja Cements acquires 46.8% stake in Orient Cement for ₹8,100 crore, aiming to increase market share and capacity.

Sharing the rationale behind this investment, Ambuja said it helps the company to increase its presence by 8.5 MTPA in core market of South & West India.

Ambuja Cements , India's No.2 cement maker, said on Tuesday it would buy a nearly 47% stake in rival Orient Cement for 37.91 billion rupees ($451 million), but analysts raised doubts about the deal winning regulatory approval.

Ambuja Cements Ltd., part of the Adani Group, has agreed to acquire Orient Cement Ltd. in a deal valued at 81 billion rupees ($963 million), as billionaire Gautam Adani continues to snap up makers of the key raw material needed for India’s infrastructure push.

With this acquisition, Ambuja Cements will enhance its total operational capacity to 97.4 MTPA, fast-tracking its goal to achieve over 100 MTPA by March 2025.

Ambuja Cements, India's No.2 cement maker, said on Tuesday that it would buy a nearly 47% stake in rival Orient Cement for 37.91 billion rupees ($451 million), but analysts said there were doubts about the deal receiving regulatory approval.