"Ambuja-ACC to Invest ₹1,000 Crore in New Offices in Ahmedabad and Delhi"

Gautam Adani-promoted Ambuja Cements has announced plans for a nearly ₹1,000 crore capital expenditure to build two new office buildings: a major cement house in Ahmedabad and a regional office in Delhi.

Vinod Bahety, Chief Financial Officer of Ambuja Cements, revealed during a call with analysts following the company's June 2024 quarter earnings that the Ahmedabad project will involve an investment of approximately ₹600 to ₹700 crore. The new cement house in Ahmedabad follows the recent relocation of ACC’s registered address from Mumbai to the Adani Corporate House in Shantigram, Ahmedabad.

Additionally, Bahety confirmed that the regional office in Delhi will require less than ₹500 crore. Combined, the total investment for both projects is estimated to be around ₹1,000 crore.

An email inquiry sent to Ambuja Cements seeking further details about the expenditure and its rationale had not received a response by press time. Ajay Kapur, CEO of the company, mentioned in the earnings call that the capital expenditure for these office buildings is recorded on ACC’s books.

For context, in April, Ambuja Cements agreed to acquire a 1.5 million tonnes per annum (MTPA) capacity from My Home Industries in Tamil Nadu for ₹413.75 crore.

The planned expenditure has raised eyebrows among analysts, with some questioning the need for such significant spending on a regional office in Delhi. It remains unclear whether the budget includes land costs, as email queries on this topic also went unanswered.

ACC’s former Mumbai office building, known as Cement House, was a heritage property. It is unknown if the South-Mumbai address will be repurposed for other group businesses. This decision echoes a similar case in 2020 when Kalpataru Power Transmission shelved a ₹377 crore capex plan for new office space in Mumbai, leading to questions about the rationale behind such investments.

BS