 "Ambuja-ACC plans to set up Rs 1,000 crore offices in Ahmedabad, Delhi")
Gautam Adani-promoted Ambuja Cements has planned a nearly Rs 1,000 crore worth of capital expenditure to build two offices, a cement house in Ahmedabad and a regional one in Delhi.
“We are constructing a full-fledged cement house in Ahmedabad and this will be almost closer to Rs 600 to Rs 700 crore,” said Vinod Bahety, chief financial officer of Ambuja Cements, in a call with analysts post the company's June-2024 ended quarter earnings call.
The decision follows the company changing ACC’s, which is Ambuja Cements subsidiary, registered address from Mumbai to Adani Corporate House at Shantigram in Ahmedabad in the last financial year.
An email query sent to Ambuja Cements on Friday requesting details and rationale of the expense remained unanswered till the time of going to press.
Bahety, on the call with analysts, added, “Another office which we are constructing as a regional office is in Delhi and that would also stand below Rs 500 crore. So together, about Rs 1,000 odd crore will be the two buildings coming up both in Ahmedabad and Delhi.”
A transcript of the call is available as part of the stock exchange disclosures. In the call, Ajay Kapur, chief executive officer of the company, said the office building capex is on ACC’s books.
To put the spend in context, in April, Ambuja Cements agreed to acquire a 1.5 million tonnes per annum (MTPA) capacity from My Home Industries, located in Tamil Nadu at a total value of Rs 413.75 crore.
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An analyst, who did not wish to be identified, said, “That much spending and a need for a regional office in Delhi is surprising.” It is not clear whether the expenditure includes land costs. Email queries regarding whether the capex includes land costs remained unanswered till the time of going to the press.
ACC’s Mumbai office building, named Cement House, which served as its registered office until recently, is a heritage property. Queries on whether the South-Mumbai address will be used for other group businesses also remained unanswered.
In 2020, Kalpataru Power Transmission had shelved a capex plan of construction of a new office space in Mumbai for Rs 377 crore. Multiple analysts had questioned the rationale for Kalpataru's capex, which included land purchase, construction and related costs.