India is the second-largest cement producer in the world and accounts for over 8% of the global installed capacity. Of the total capacity, 98% lies with the private sector and the rest with the public sector. The top 20 companies account for around 70% of the total cement production in India. As India has a high quantity and quality of limestone deposits throughout the country, the cement industry promises huge potential for growth.
In 2023, the market size of India’s cement industry reached 3.96 billion tonnes and is expected to touch 5.99 billion tonnes by 2032, exhibiting a CAGR of 4.7% during 2024-32. India's cement production reached 374.55 million tonnes in FY23, a growth rate of 6.83% year-on-year (yoy).
India’s cement production for FY24 is expected to grow by 7-8% driven by infrastructure-led investment and mass residential projects.
The Indian cement sector's capacity is expected to expand at a compound annual growth rate (CAGR) of 4-5% over the four-year period up to the end of FY27. It would thus begin the 2028 financial year at 715-725 MT/ year in installed capacity.
Cement consumption is expected to reach 450.78 million tonnes by the end of FY27.
At present, the installed capacity of cement in India is 600 MTPA with a production of 391 MTPA.
The Indian cement industry is proceeding with expansion plans and capacity additions, despite dampened demand expected to persist through the first half of FY25. Cement giants foresee a modest 6-7% volume growth this fiscal year, even though the period has begun with a pricing downturn.
The Cement sector has received good investments and support from the Government in the recent past.
The cement sector saw a modest growth of 2-3% in Q1FY25, primarily due to a slowdown in construction during the Lok Sabha elections. However, ICRA projects a 7-8% growth for FY2024-25, driven by strong demand in infrastructure and housing.
In 2023, infrastructure emerged as the top sector, attracting US$ 11.6 billion across 57 deals, marking a 29% year-on-year growth (compared to US$ 9 billion across 75 deals in 2022), representing the second-highest investment level ever in PE/VC.
Indian cement demand is projected to grow by 6-7% in FY25, following a strong 7-8% YoY growth in the last quarter of FY24. Despite a pricing downturn due to increased competition, average cement prices declined by around 1.5% in FY24.
The Mumbai-Ahmedabad Bullet Train Corridor is significantly boosting the cement and construction industry, utilizing around 20,000 cubic meters of cement daily—equivalent to eight 10-story buildings. This project, spanning 508 km with multiple stations and tunnels, has generated substantial employment, with about 20,000 workers engaged daily.
Real estate followed closely as the second-largest sector in 2023, witnessing a record-high of US$ 8 billion across 55 deals, reflecting a 15% increase year-on-year (compared to US$ 6.9 billion across 95 deals in 2022), marking the highest-ever value of PE/VC investments in this sector.
The real estate sector received the highest value of PE/VC investments in Q1 (January-March) of 2023 at US$ 5 billion, registering a year-over-year 123% growth.
India's top four cement companies—UltraTech, ACC-Ambuja, Shree Cement, and Dalmia Cement—are set to add over 42 million tonnes of capacity in FY25, increasing their market share from 48% in FY23 to an expected 54% by FY26.
Ultratech Cement predicts an 8% rise in cement demand, driven by increased construction activities, government spending on infrastructure, and ongoing residential projects across India.
In October 2023, the real estate sector received the second-highest PE/VC investments at US$ 601 million across six deals.
In April 2023, the infrastructure and real estate asset class recorded US$ 3 billion in PE/VC investments, an 82% increase y-o-y and a 3% increase over March 2023.
In 2022, PE/VC investments in real estate and infrastructure stood at US$ 5.81 billion across 71 deals and US$ 7.9 billion across 47 deals respectively.
PE/VC investments in real estate and infrastructure witnessed a sharp growth of 27%, at US$ 13.7 billion in December 2022 as compared to US$ 10.7 billion in December 2021
FDI inflows in the industry, related to the manufacturing of cement and gypsum products, reached US$ 6.10 billion between April 2000-December 2023.
JSW Group initiates IPO process for JSW Cement, aiming to raise Rs. 6,000 crore (~US$ 723 million), potentially the largest in the sector, with an array of bankers enlisted. Plans include diluting 10-15% stake, with further dilution over two years for capacity expansion to 60 MTPA.
Shree Cement announces US$ 844 million (Rs. 7,000 crore) investment for 12 million tonnes capacity expansion in India, including clinker manufacturing plants in Rajasthan and Karnataka, along with cement plants in Rajasthan, Uttar Pradesh, and Karnataka by March 2025.
UltraTech Cement Limited pledged Rs. 1,000 crore (US$ 120.3 million), while Star Cement committed Rs. 650 crore (US$ 78.3 million) on the inaugural day, December 13, of the Bihar Business Connect-2023 Global Investors Summit at Gyan Bhawan, Patna. 15 prominent companies in general manufacturing also signed Memorandums of Understandings.
In June 2023, Shree Cement announced four planned capacity expansion projects that aim to increase its installed cement production capacity by 20% to 55.9 MT/year.
In June 2022, UltraTech Cement approved Rs. 12,886 crore (US$ 1.65 billion) capital expenditure to increase capacity by 22.6 million tonnes per annum (MTPA) through brownfield and greenfield projects.
PE/VC investments in real estate and infrastructure stood at US$ 338 million and US$ 795 million respectively in September 2022.
India's cement production was expected to range between 380-390 million tonnes in FY23, a growth rate of 8-9% year-on-year (yoy).
Cement production increased by 1.9% in June 2024 over June 2023. Its cumulative index increased by 0.3% during April-June, 2024-25 over the corresponding period of the previous year.
Cement production in India increased by 12.1% in September 2022 compared to September 2021.
Adani Group will set up two new cement manufacturing plants, 15,000 MW of renewable power projects, and a data centre in Andhra Pradesh.
In November 2023, ACC received a renewed licence for its Rajasthan limestone mine, allowing it to increase its extraction of limestone there to 1.5 million tonnes per year.
In December 2023, UltraTech Cement concluded an agreement to acquire Kesoram Cement from Kesoram Industries for US$ 912 million.
In October 2023, UltraTech Cement announced planned new capital expenditure (CAPEX) investments worth US$ 1.56 billion to grow its production capacity, beginning in the 2026 financial year.
In October 2023, Dalmia Bharat announced a planned investment of US$ 10.9 million in a grinding unit expansion at its 1 million tonnes/year Banjari cement plant in Bihar.
An MoU was signed between Star Cement Limited and the Government of Assam for an investment worth Rs. 1,400 crore (US$ 170.9 million) for setting up a Cement Grinding unit in Guwahati and another Cement Grinding unit in Cachar and AEC Block and other construction manufacturing units in Guwahati.
Ramco Cements is planning to invest a total of US$ 91.3 million towards growing its capacity in FY24. Its planned investments consist of US$ 15.8 million in an expansion to its Haridaspur grinding plant in Odisha and US$ 75.5 million in the acquisition of land in Bommanalli, Karnataka, on which to establish a limestone mine.
Bihar Chief Minister Mr. Nitish Kumar laid the foundation for a Rs. 1,600 crore (US$ 191 million) cement grinding unit by Ambuja Concrete in Nawada. The 6 MTPA project will create 250 direct and 1,000 indirect jobs, with the first phase expected by December 2025.
Dalmia Cement (Bharat) is planning to invest US$ 560 million following the signing of a memorandum of understanding (MoU) with the Assam government on the construction of a new cement plant in the state.
In October 2022, UltraTech announced that it has been granted Environmental Product Declaration (EPD) certificates for four of its cement products, which are Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC) and PCC (Portland Composite Cement).
As per the Union Budget 2022-23, there was a higher allocation for infrastructure to the tune of US$ 26.74 billion in roads and US$ 18.84 billion in railways is likely to boost demand for cement.
Under the housing for all segments, 8 million households will be identified according to Rs. 48,000 crore (US$ 6.44 billion) set aside for PM Awas Yojana.
The government approved an outlay of Rs. 199,107 crore (US$ 26.74 billion) for the Ministry of Road Transport and Highways, and this step is likely to boost the demand for cement.
Several government schemes such as MGNREGA, PM Garib Kalyan Rozgar Abhiyan and state-level schemes such as Matir Srisht (West Bengal) and public work schemes (Jharkhand) have aided demand
On January 8, 2024, ACC Ltd, a subsidiary of Adani-owned Ambuja Cement, completed the acquisition of the remaining 55% stake in Asian Concretes and Cements Private Ltd (ACCPL) for Rs.425.96 crore (US$ 50 million), increasing ACC's total cement production capacity to 38.55 MTPA. This acquisition raises the Adani Group's overall cement capacity to 77.40 MTPA, with plans to expand to 106 MTPA by FY26.
In October 2021, Prime Minister, Mr. Narendra Modi, launched the ‘PM Gati Shakti - National Master Plan (NMP)’ for multimodal connectivity. Gati Shakti will bring synergy to create a world-class, seamless multimodal transport network in India. This will boost the demand for cement in the future.
Growth in the Infrastructure and real estate sector, post-COVID-19 pandemic, is likely to augment the demand for cement in 2022. The industry is likely to add an ~8 MTPA capacity in cement production.
India’s export of panel cement, clinkers, and asbestos cement products stood at US$ 682.32 million in FY23 while the imports were US$ 288.42 million.
As per DGCIS, India’s export of Portland cement, aluminous cement, slag cement, supersulphate cement and similar hydraulic cement stood at US$ 587.71 million (Rs. 4,894 crore) in FY24 while the imports were US$ 166.50 million (Rs. 1,386 crore).
The Government of India is strongly focused on infrastructure development to boost economic growth and is aiming for 100 smart cities. The Government also intends to expand the capacity of railways and the facilities for handling and storage to ease the transportation of cement and reduce transportation costs. These measures would lead to increased construction activity, thereby boosting cement demand.
The future outlook of the cement sector looks on track with the pandemic easing out.
In the next 10 years, India could become the main exporter of clinker and grey cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance, the plants in Gujarat and Visakhapatnam, will have an added advantage for export and will logistically be well-armed to face stiff competition from cement plants in the interior of the country. India’s cement production capacity is expected to reach 550 MT by 2025. The cement demand in India is estimated to touch 419.92 MT by FY27 driven by the expanding demand of different sectors, i.e., housing, commercial construction, and industrial construction.
