Wholly owned by Government of Andhra Pradesh (GoAP), nodal agency for development of mining in the state
Established on February 24, 1961, Andhra Pradesh Mineral Development Corporation Limited (APMDCL) formerly known as A.P. Mining Corporation Limited is a wholly owned entity of the Government of Andhra Pradesh (GoAP) and is under administrative control of Mines and Geology Department, which is the nodal department in the GoAP. APMDCL is engaged in exploration, exploitation, conservation and processing of mineral resources while promoting mineral based industries. The company has been one of the largest global producers and suppliers of barytes since 1975, currently contributing to ~90-95% of India’s baryte production. In addition to barytes, APMDCL has diversified into coal mining having been allocated two coal blocks in Madhya Pradesh and Jharkhand with commercial production from the Suliyari coal block commencing in March 2022. Its mining portfolio also includes granite, ball clay and iron ore and the company is actively planning diversification into minor minerals through 436 designated minor mineral mines by FY2027 and into beach sand minerals by 2029.
Strong growth in operating performance, albeit moderation in FY2025
APMDCL’s operating income increased to Rs. 3,841.82 Cr. in FY2024 from Rs. 2,102.39 Cr. in FY2023 reflecting an 83% year-on-year growth, primarily driven by increased coal mining activity. However, revenue is expected to moderate in FY2025, largely due to lower baryte sales during June-August 2024, although improvements are expected in the near term. The company reported revenue of Rs.2,205.83 Cr in 9MFY2025.
The profitability remains strong with EBITDA margin 41.55% in FY2024 as against 39.87% in FY2023 while the PAT margin stood at 27.62% in FY2024, compared to 28.44% in FY2023. Further, APMDCL’s operating margin for 9MFY2025 stood at 35%.
Going ahead, APMDCL’s operational performance is expected to strengthen, supported by further diversification of its revenue profile. This will be driven by commencement of commercial production at 436 designated minor mineral mines from FY2027 and exploration of beach sand minerals by FY2029, which are expected to contribute to sustained growth in the medium to long term.
Structured payment mechanism
Under this structure, APMDC would ensure that on the first working day of every quarterly servicing cycle, an amount equivalent to 30% of the requisite servicing amount should get transferred from RCA to the BSA. The company should further transfer an amount equivalent to 35% of the quarterly servicing requirement both by T-60 and T-30 (i.e. 60 and 30 days prior to the servicing date) to BSA from the RCA so as to ensure full built up of servicing amount payable at least 30 days prior to the relevant quarterly servicing date (T-30). The Debenture Trustee (DT) should independently check whether the requisite amount of funds has been transferred to BSA on the next working days in all the above cases and in case of any shortfall in amounts transferred, must immediately enforce the Default Escrow arrangement on RCA, which shall remain in force till the entire built up of the particular cycle gets completed. In the event of DT finding any shortfall during the monitoring on T-29 days, it shall immediately send a written communication to the State Government to provide fund support for meeting the shortfall. A provision in the Guarantee Deed would specifically stipulate a pre-invocation responsibility of the State Government to bridge this shortfall on or before T-9 to prevent any DSRA impairment and consequential invocation of the guarantee. In case the shortfall in BSA still persists on T-5 day, such shortfall would be met by transferring requisite funds from DSRA to BSA. On the due date, the payout would be made to the Bond holders from BSA.
DSRA shortfall guarantee from GoAP and support from DDM
In the event of any shortfall in DSRA due to impairment on account of transfer of funds to BSA or for any other reason, the DT would send DSRA shortfall notice to GoAP on the next day (T+1) stating that if the amount is not fully replenished within the next 30 days, the guarantee would be invoked to the extent of such shortfall along with simultaneous triggering of defined recourse mechanism – Direct Debit Mechanism from the consolidated funds of GoAP (i.e. DDM) in the post invocation scenario.
The Debenture Trustee should also ensure that the Default Escrow Mechanism on RCA remains in force till all the irregularities including requisite DSRA replenishment get completely remedied.
If DSRA is not fully restored at the expiry of aforesaid 30 days, the Debenture Trustee would invoke the guarantee to the extent of such shortfall on the next working day (T+31) through issue of Guarantee Invocation Notice, along with simultaneous triggering of DDM in the post invocation scenario.
