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StarBigBloc Building Material, a group company of BigBloc Construction, has acquired 57,500 square metres of land in Khargone, Madhya Pradesh, for INR 6 crore to set up a greenfield AAC block plant. The company plans to raise its production capacity from the existing 250,000 cubic metres per annum to more than 1.2 million cubic metres per annum in the next 4-5 years. This growth is in line with its growth strategy, with emphasis on geographic expansion, R&D, and market visibility. BigBloc Construction is expecting revenue of INR 428 crore by FY27-28, underpinned by its fundraising plans through an SME IPO or preferential issue approved in the past. The step also indicates increasing demand for AAC blocks, supported by government infrastructure projects and the company's steady financial performance.
BigBloc Building Material, a subsidiary wholly owned by BigBloc Construction, has made its first major stride towards expanding business by acquiring land measuring 57,500 square metres in Madhya Pradesh's Khargone. The property, bought at INR 6 crore, will be employed to establish a greenfield factory for producing AAC (autoclaved aerated concrete) blocks. Advertisement
The company currently has a plant in Kheda, close to Ahmedabad, with an annual production capacity of 250,000 cubic metres. The utilisation of this plant for the third quarter was at 756. This plant has been the driving force behind the growth of the company, making it a leading player in the AAC block market.
The Indore proposed facility is one of the company's strategic growth plans. BigBloc Construction's chairman, Narayan Saboo, added that the expansion is in accordance with their aims to expand geographic reach, spend on research and development, expand their product base, and grow branding and marketing. Saboo pointed out that these plans aim to enhance market visibility, enlarge market share, and improve stakeholder confidence.
AAC blocks have been in greater demand because of their lightweight, thermal insulation, and environmental-friendly nature, making them a sought-after option for residential, commercial, and industrial buildings. Increased demand is also being driven by the government's emphasis on infrastructure development and subsidized housing plans, including the Pradhan Mantri Awas Yojana (PMAY).
BigBloc Construction has followed a pattern of slow expansions, first consolidating its base in western India before foraying into new territories. Its move to set up a facility in Madhya Pradesh follows this cautious strategy of expansion. In support of the growth plans, the board of directors had sanctioned a fundraising plan in May 2024, including alternatives like an SME IPO or a preferential issue. This funding will deliver the required capital to implement the company's ambitious growth plans.
In the future, the company is planning a huge capacity expansion, from its present 250,000 cubic metres per year to more than 1.2 million cubic metres per year in the next 4-5 years. Financially, BigBloc Construction has planned an ambitious target of achieving revenue of INR 428 crore by FY27-28, with EBITDA estimates of INR 125 crore and net profit of INR 80 crore. For comparison, the firm had a revenue of INR 94.18 crore in FY24. With a growing market for AAC blocks and mounting interest in sustainability, BigBloc Construction's expansion is timely. The Indore greenfield facility will not only meet the surging demand for AAC blocks but also enable the company to further establish its leadership position in the construction materials industry.
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