Adani group firm Ambuja Cement bags 24 bids for new limestone mines in FY24

New Delhi: Adani group firm Ambuja Cements, which is aggressively pushing for expansion, has won 24 bids for new limestone mines estimated to have a total resource of 587 million tonnes of limestone, according to the company’s annual report.

This is in addition to 1 billion tonnes of reserve of Sanghi Industries, a Saurashtra-based company which billionaire Gautam Adani-owned firm acquired last November at an enterprise value of Rs 5,185 crore. “Winning bids for coal and limestone mines is critical to ensure self sufficiency, with coal mines in Dahegaon-Gowari and the existing Gare Palma coal block catering to 40 per cent of Ambuja Cements Ltd (ACL) coal requirements,” it said.

The Adani group has an ambition to have a capacity of 140 MTPA (million tonnes per annum) by 2028. It has sufficient cash to reach there through a combination of brownfield expansion and acquisitions.

Earlier this month, Adani Group announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of Rs 10,422 crore, which will add 14 MTPA to the growth-hungry ACL taking its total capacity to 89 MTPA.

This was an all-cash deal and during the analyst call after the deal, ACL CFO Vinod Bahety said even after this acquisition of Penna Cement, which will help it to increase its share in the Southern market and entry into Sri Lanka, it will be holding another Rs 10,000 crore cash by the end of this year.

“Since you all know that we have been sitting on good cash and cash equivalent, it will be a good deployment of this amount and earning much more than 15 per cent in terms of ROCE (Return on capital employed),” he said.

Bahety further added: “The entire acquisition will be funded through cash and cash equivalents. After all of this also, by end of this year, my estimate is that we will be holding almost Rs 10,000 plus crores of cash.”

Besides, the company is also increasing its share of alternative fuels and green power.

“With an investment of over Rs 10,000 crore in green power projects, the Company aims to power 60 per cent of its expanded capacity through 1 GW of solar and wind power and 376 MW of waste heat recovery system by FY2027-28 and leveraging compelling economic advantages,” it said.

Besides, Ambuja Cements said it has plans to expand the master supply agreement with its subsidiary ACC Ltd and the newly acquired Sanghi Industries Ltd (SIL) to increase revenues and profitability further.

“During the year under review, the Company sold 5.6 million tonnes CLC (Cement and Clinker (CLC))to ACC under the master supply agreement,” it said.