ValuePickr Forum

Sandur Manganese

About the Company:

  • 65 Year old company

  • Y.R. Ghorpade, the former Maharaja of Sandur, after he merged the Sandur State with Union of India, was awarded a mining lease over an area of 7500 ha. It was he, who founded the Sandur Manganese & Iron Ores Limited (SMIORE) and the lease was transferred to the company. Out of this, 2800 ha of area, which was largely iron ore bearing, was deleted when our lease was renewed in 1974 and retained by the Government. During the second renewal, the company voluntarily surrendered another 1500 ha of forest area for land preservation. Finally the lease was renewed over an area of 3200 ha with effect from 1st January 1994.

  • With a view to ensure better protection and development of the forested land, Founder Y.R. Ghorpade, magnanimously gifted about 1600 ha of his personal property in 1980. Out of the 3200 ha, we work on 2005 ha, keeping the balance 1200 ha reserved for future use.

Let’s look at some of their past nos


Then the mining crisis happened

One of the few honest company in mining

Only Mining Lessee to have been awarded 5 Star rating in the state of Karnataka and one of 3 in the Country to have got 5 Star rating

SC allowed category A mines to operate with a cap on production. This cap is being relaxed gradually.


Why it could be interesting now?

Financials -

To Summarize:

  • At Mcap of 700 Cr
  • Stock trading at 5 PE
  • Profits for last 3 years - 56 Cr, 107 Cr, 142 Cr
  • Business generates high margins and free cash flows. Co is debt free with cash on balance sheet
  • Optionality of substantial increase in operations
  • Expansion of 400-500 Cr underway - co investing into Coke Oven plan, ferro alloys etc as forward integration


  • Highly volatile commodity
  • Regulated by Govt. Strange rules in Karnataka
  • Major expansion into steel in coming years

I am a SEBI registered RA and founder of I have no current investments in this stock, neither have I recommended it to my members. However, I may do so in the future. Please do your own due diligence before deciding to invest. This post is for educational purposes only.


@basumallick I came across this company when I visited Hampi and stayed at Sandur at the Maharajah’s palace (converted into ITC Welcome Heritage hotel - Shivavilas Palace). The history of the family/promoter is impressive and as per my research from public news and ground check with few people they seem to have been running the mining operation sustainably and within legal boundaries (which is rare in most Karnataka mining operations)

But I felt that the company and promoter have social bent of mind and too focused on social welfare. Given that they were ex maharaja and also elected politician, this makes sense on their part. I don’t have any hard data point to prove it.


Holding shares since market price of 350 but sad to know 1 st quarter 2019 promoters pledged @ 55 % of shares,can u throw some light why

Good read to understand company history and future plans. Analyst meet with Ayush Mittal.


Hi @vipinsays,

Sandur Manganese has taken up a capex plan and needs approx 650 Cr for its Phase-1. Out of which 400-450 Cr is to be funded by debt and remaining equity.
Company towards the end of Q4FY19 has started implementing the plan and to secure the 470 Cr debt from Axis, ICICI & Indusind bank a promoter company called Skand Pvt Ltd has pledged 35 Lac shares with Axis Trustee Service Ltd (acting on behalf of lenders).
The reason we don’t see debt on the books as yet is that the transaction happened near the FY closing. We should expect to see debt in half year b/s (Company has so far drawn 150 Cr debt in Q1FY20).

Skand Pvt Ltd is the majority holder of SMIORE with 46 Lac shares i.e 52.94% holding. It has 2 main directors, belonging to the promoter family, Mr. Suryaprabha Ajai Ghorpade and Mr. Ajai Murar Rao Ghorpade.

Hope this helps!

Yogansh Jeswani
Disclosure: Tracking


Good to read the latest annual report -

Sharing my notes:

Notes from AR19:
* Income increased 16% to 720 Cr. NP of 142 Cr vs 107 Cr.
* Max permissible production of both iron ore 16 lac tonne and manganese ore at 2.85 lac tonne done during the year.
* To pursue 1 mln tonne steel plant, it is important to pursue enhancement of iron ore production from 1.6 MTPY to 3.85 MTPY. This is all more important as nearly 40 mining leases are expiring in Karnataka in 2020. It is a gloomy prospect as far as supply disruption of iron ore goes.
In this context, SMIORE had applied way back in 2009 for production enhancement but processing the application was suspended due to SC’s ban on mining on July 2011. The co recently followed up the application, updating all clearances at the behest of MoEFCC. Hopefully the approval for enhancement to 3.85 MTPY will be obtained soon.
* 1 MT steel project took off with the construction work of 400 ktpy vertical coke oven batteries in July 2018. After crucial preheating of the ovens, 50% of the coke output is expected in November from two sets of batteries and remaining two by Feb 2020 to begin full scale commercial production. Once this is commissioned, the power generated by the hot gases from the coke ovens will be fully utilized in the ferro alloy plant, which is undergoing, installation of furnace, repair and refurbishment of two existing furnaces. Cost of gas fired power is substantially cheaper than the current coal fired thermal power. Consequently, the production of ferro alloys will become more viable and will have a competitive edge.
* The 400 kt metallurgical coke produced per annum would be sold to neighbouring steel plants and foundries. The installed capacity would constitute 50% of the local demand other than that of JSW. Once the power plant and ferro alloy plant are stabilized, we could confidently proceed with the installation of blast furnace for pig iron smelting in Stage II of phase 1. This would require half of the coke produced and promote value addition of iron ore by way of 70% sinterfeed.
* The co is targeting commercial production from Coke Oven plant by March 2020. Installation of new 24 MVA furnace is expected by December 2019 and refurbishment of 20 MVA and 15 MVA furnaces by March 2020 and June 2020 respectively. On account of the unexpected delay in clearance for forest land required for setting up Downhill conveyor system (DCS) and construction of mines roads, these two are expected to be completed by June 2020.
* The co has successively received “Five star” rating for all the three years and is the only mining company in Karnataka to have done so. The co has qualified for “Five Star” rating for 17-18 & 18-19 based on the template.
* Production in Karnataka was 29.5 mln vs limit of 35 mln. Production came down due to stoppage of Donimalai mine. Though the mine was renewed but the government asked for 80% premium. Buyers in Karnataka could import iron ore but miners couldn’t export the same. Monitoring committee has recommended exports to the extent imports take place.
* Grade of Mn Ore lumps sold by the company improved by 1 unit of Mn, and consequently realisation on sale of Mn Ore rose by nearly 2000 per tonne. Improvement in realisation was both due to quality and market condition. Grade of MN Ore production by the company is expected to improve further.

Overall, personally I feel the stock is trading at very attractive valuations due to robust earning and cash flow. Also, there is optionality of material increase in earning once they get approval to expand mining operations. Also, the capex being done should result in earning expansion. Negative - if iron ore prices fall a lot (given the weak sentiments in steel industry), negative operating leverage will hit the earnings.

Disc: Invested. Views would be biased