Another cement company is ready to rock the stock market. Indeed, many companies have resorted to the IPO route this year, including Nuvoco Vistas Corp Ltd, the cement company of the Nirma Group, to raise funds from the primary market and enter the stock market. Now the name of Hyderabad-based cement company Penna Cement Industries has also been added to this list.
Penna Cement has submitted a draft Red Herring Prospectus (DRHP) to the market regulator SEBI to raise Rs 1550 crore. Whereas, Nuvoco Vistas Corp. Ltd applied for an IPO of 5000 on 6 May. Penna Cement will issue fresh shares worth Rs 1,300 crore in its proposed IPO, while the promoters of the company will issue shares worth Rs 250 crore through the offer for sale.
Let us tell you that the company promoter PR Cement Holdings Ltd has a 33.41% stake in Penna Cement Industries. Penna Cement has appointed Edelweiss Financial Services, Axis Capital, ICICI Securities, JM Financial and Yes Securities as its lead managers for this IPO.
Funds will be used here
Penna Cement will use Rs 550 crore from the funds raised through this IPO to pay off its debt. The company had a debt of Rs 1,548.87 crore as on 31 March 2021. At the same time, the company will use Rs 105 crore to fund the capital expenditure of its KP Line II projects.
The company will use Rs 80 crore to upgrade the company’s Raw Grinding and Seamet Mill in Talaricheruvu. 110 crores will be spent to establish a WHR plant here and the company will spend 130 crores to set up a WHR plant in Tandu.
Such is the balance sheet
The total income of the company stood at Rs 2,599.35 crore in FY21, compared to only Rs 2,176.25 crore in FY20. The company’s net profit during this period stood at Rs 152.07 crore, compared to only Rs 23.02 crore a year ago. Let us tell you that Penna Cement is among the top private cement companies in the country.
The company has 4 integrated manufacturing units and 2 grinding units in Andhra Pradesh, Telangana and Maharashtra. The company has an annual capacity of 10 million tonnes of cement production. The company intends to increase it to 16.5 MMTPA by FY24. Also the company produces 7.8 MMTPA clinker which is planned to be 10.8 MMTPA by FY24.
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