Mumbai: Binani Cement is entering the capital market with a public offer of 2.05 crore equity shares of Rs10 each within the price band of Rs75-85.
“The company is launching an IPO of about two crore shares proposing to get listed both on NSE and BSE,” Binani Industries Ltd (BIL) chairman Braj Binani said here on 27 April.
The IPO will open on 7 May and close for subscription on 10 May with the offer constituting 10.09% of the post-offer paid-up capital of the company.
The shares are through an offer for sale by JP Morgan Special Situations, which currently holds 25% of the company’s equity.
“Post-issue JP Morgan will hold 15% of the equity. BIL holds 65% while Credit Suisse First Boston holds the remaining 10% of the company’s shares,” he said.
The offer will be through 100% book building process. The book-running lead manager to the issue is ICICI Securities Primary Dealership and co-book running lead manager is JP Morgan India.
The company, with a current capacity of 2.3 MT of cement, aims to take production to 10-12 MT in next 3-4 years.
“In next 3-4 years time, we are looking at 10-12 MT of capacity. Apart from increasing production capacity of our current plant in Rajasthan to 6 MT by next year, we will come up with two more plants in Gujarat and Eastern India,” he said.
Refusing to divulge the investment details, he said the company had not finalised the location for the new plant in eastern India.
The company will expand the capacity of its Rajasthan plant to 5.3 MT by next month with an investment of Rs575 crore.
The money for the expansion will be generated through internal accruals and debt.
“The equity sale is by JP Morgan and not by the company, thus money raised will not be used by us,” Binani Industries managing director Sushil Bhatter said.
Binani Cement has presence in Rajasthan, Haryana, Delhi and Gujarat with an overall market share of about four per cent.
“We’re looking at the east India markets with one of our new plant slated to be there,” he said.
The company’s sales stood at Rs782 crore and profit after tax Rs95.6 crore for 2006-07, he said.