Binani Cement to enter capital market on May 7

New Delhi, Apr 30 (UNI) Binani Cement Ltd, a subsidiary of Rs 750 crore Binani Industries Ltd (BIL), will enter the capital market with an initial public offer of 20.5 million equity shares of Rs 10 each at a price band between Rs 75-85 per equity share.

The public offer opens on May 7 and closes the subscription on the May 10. The offer will be through 100 per cent book-building process and constitute 10.09 per cent of the post-offer paid-up capital of the company.

''The equity shares are proposed to be listed both on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE),'' Binani Cement Executive Director S Sundararajan said.

He added that the company is focussing on the key markets in the north with significant presence in Rajasthan, Haryana and Delhi, besides, Gujarat and is expecting more sales in Punjab, Western Uttar Pradesh and Jammu and Kashmir this fiscal.

At least 60 per cent of the offer will be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs).

Up to 30 per cent of the offer will be opened for allocation on a proportionate basis to retail individual bidders and 10 per cent to non-institutional bidders, subject to valid bids being received at or above the offer price.

Mr Sundararajan further said the company has increased its manufacturing capacity from 2.25 metric tonne per annum (MTPA) to 5.3 MTPA at Sirohi in Rajasthan, adding that they will begin production on the enhanced capacity from next month, increasing the supply.

Binani Cement is entering the market through an offer for sale by JP Morgan Special Situations (Mauritius), the selling shareholder.

It invested Rs 120 crore in September 2005 for the purchase of equity shares and extended a term loan of Rs 130 crore for expansion of cement capacity.

The company posted a total income of Rs 584 crore and a profit before tax of Rs 58.1 crore for the year ended March 31, 2007.

Mr Sundararajan said the company is expecting further growth in net sales after posting profit after tax of Rs 70.1 crore in 2006-07.

He said, ''The company is expecting to double its revenues by this year with an increased capacity. '' ''No other enterprise has the price band of Rs 75 and Rs 85 per equity share at a capacity of four to five million tonnes. This is agressive,'' he told reporters.

Mr Sundararajan said the company is mulling to double its capacity by the year 2010-11 by building plants in Coastal Gujarat and Eastern India with an investment plan of Rs 1,400 to 1,600 crore.

UNI