Will explore acquisition possibilities at the right price: Shree Cement V-C

Shree Cement will continue to explore acquisition opportunities "at the right price," Prashant Bangur, vice chairman, said.

The company recently lost out in the race for Sanghi Industries, which was acquired by Adani-owned Ambuja Cements in August at an enterprise value of Rs 5,000 crore. Shree Cement's bid was understood to be significantly lower.

Bangur said that the company would evaluate acquisition opportunities in any part of the country, provided it made sense in terms of valuation. "Acquisition is a chance game," Bangur also noted. He was speaking on the sidelines of Statecon, an annual real estate conference organised under the aegis of CREDAI West Bengal.

As it scouts for inorganic options, Shree Cement is also stepping up on its organic growth plans. On Monday, West Bengal Chief Minister Mamata Banerjee virtually inaugurated a three million-tonne grinding unit, located in Purulia district. With this, Shree Cement's total cement production capacity would stand at 50 mt. The investment in Purulia is about Rs 750 crore.

Prashant Bangur said that the company would announce more projects in the coming weeks, which would be a mix of brownfield and greenfield, as part of its roadmap to achieve 80 mt capacity by 2030.

In July, the company announced its next phase of capacity expansion projects of 12 mt to take the group's cement capacity to 72.4 mt. The board approved a capital expenditure of around Rs 7,000 crore for the purpose. The projects were in Rajasthan, Uttar Pradesh and Karnataka.

Shree Cement's ongoing capex programmes include an integrated unit at Nawalgarh in Rajasthan, which is expected to be commissioned in Q3 FY24. A plant at Guntur, Andhra Pradesh is targeting commissioning in Q2 FY25.

Shree Cement's plans are in sync with a major consolidation drive in the industry. The cement sector is seeing heightened activity with top players such as UltraTech, Ambuja-ACC, Dalmia, and JSW looking to increase their share.

A CRISIL report in June mentioned that the top five players comprised 55 per cent volume share last fiscal year compared with 49 per cent pre-Covid-19.