Adani-backed Ambuja Cement declares Bihar project with net investment worth ₹1,600 crore: Here’s what it entails

Billionaire Gautam Adani's Group-owned Ambuja Cements announced on Saturday, August 3, that it will invest ₹1,600 crore in its first project in Bihar, marking the largest investment by a cement industry player in the state. As part of the project, Ambuja Cement will set up a cement grinding unit with a total capacity of six million tonnes per annum (MTPA) at Warisaliganj, Bihar.

According to a press release by Ambuja Cement, the cement project will be implemented in three phases. The first phase, which will be 2.4 MTPA at an investment of ₹1,100 crore, is targeted to be commissioned by December 2025. Adequate provisioning of land for future expansion is in place, and it will be commissioned in due course at a much lower capital expenditure.

Also Read: Ambuja Cement Q1FY25 net profit down 29%, revenues fall 5%

Ambuja Cement's project in Bihar: What does it entail?

The project aims to boost state infrastructure. It will likely contribute approximately ₹250 crore per year to the state's fiscal revenue and create 250 direct and 1000 indirect jobs for Bihar. The cement-grinding unit's site is in Mosama village, Warisaliganj Tehsil, Nawada district, Bihar. It is well-connected by road and rail, and the Warisaliganj railway station is one km away.

The Bihar Industrial Area Development Authority (BIADA) hosted the foundation stone-laying ceremony. BIADA has allotted 67.90 acres of land for the upcoming cement-grinding unit for which environmental clearance has been obtained. 

In addition to Warisaliganj, Ambuja Cements has been allotted 26.60 acres of land by the BIADA for another cement unit in the industrial area of Mahbal, Motipur, Muzaffarpur. The environmental clearance for this project is being processed, and work on this project is likely to start shortly.

Also Read: Budget 2024: ₹26k crore for Bihar highways may boost cement, infra stocks, say analysts

Commenting on the project, Pranav Adani, Managing Director (Agro, Oil and Gas) and Director, Adani Enterprises said, "This investment aligns with the state government's development programmes and our growth plans. The cement industry is seeing healthy volumes due to the government's infrastructure thrust, and Ambuja Cements is well-positioned to support sustainable infrastructure development in the country.''

“We look forward to collaborating with the state government, authorities, and local communities on this and future projects. The state government's support in fast-tracking and provisioning of all permits has made this landmark investment possible in a short time,” added Adani.

Adani Group recently announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of ₹10,422 crore, which will add 14 MTPA, taking its capacity to 93 MTPA. The Group aims to achieve a 140 MTPA capacity by FY28 and is aggressively expanding organically through capacity expansion at the existing units and also going for acquisitions. Through Ambuja, it also controls ACC Ltd and acquired MyHome Industries and Sanghi Industries in 2023.

Also Read: Promoters Ambuja Cements, Ravi Sanghi to offload 3.52% stake in Sanghi Industries

Budget 2024 Updates

Ambuja Cements said the project will meet Bihar's growing infrastructure needs, aligning with priorities outlined in the Union Budget 2024. Last month, the Narendra Modi-led government unveiled big-ticket projects for Bihar in Budget 2024, proposing a total outlay of over ₹60,000 crore for various projects, including funding for three expressways, a power plant, heritage corridors, new airports, and sports infrastructure.

Finance Minister Nirmala Sitharaman announced the Centre's support for the development of three Expressway projects—Patna-Purnea, Buxar-Bhagalpur, and Bodhgaya, Rajgir, Vaishali, and Darbhanga—and an additional two-lane bridge over the River Ganga at Buxar. These four projects will cost ₹26,000 crore in total. Bihar is in a coalition government at the Centre, with Andhra Pradesh adding 16 seats and Bihar with 12 (JDU) and five (LJP).

Also Read: Cement: Too early for the consolidation party

Ambuja Cements Q1 Results

Ambuja Cements reported a consolidated profit of ₹646.31 crore for the first quarter of the current fiscal year (Q1FY25), marking a 28.6 per cent decline year-on-year. Rising expenses and lower revenues contributed to this drop in net profit. In the same quarter last year, the company reported a consolidated profit of ₹905.61 crore attributable to its owners.

Consolidated revenue from operations fell 4.6 per cent year-on-year (YoY) to ₹8,311.48 crore, driven by declining prices. Sales volume slightly increased to 15.8 million tonnes, up 0.4 million tonnes on year. On Friday, shares of Ambuja Cements settled 1.97 per cent lower at ₹650.85 apiece on the BSE.