Jaiprakash Associates (JPA), the Jaypee Group flagship, is exploring the option of obtaining a strategic partner for its cement business, the third largest in the country.
According to three independent sources, JPA is open to diluting up to 26 per cent in the business.
Jaypee, added these sources, has roped in a clutch of investment bankers to advise on any strategic stake sale. Preliminary talks have already begun with large South America conglomerates such as Cemex and Votorantim Group, who have a global presence but are also looking at a bigger India play. A deal, if any, may still take some time to fructify.
However, Manoj Gaur, executive chairman, Jaiprakash Associates, denied a potential stake sale. “There is no plan to rope in anybody or any partner for the cement business,” he told Business Standard.
While Cemex spokesperson Jorge Luis Perez said the company would not comment on market speculation, Votorantim’s spokesperson said the company evaluated business development opportunities in key markets across the globe, including India.
“To date, however, no concrete step to enter this market has been taken, other than the 2010 acquisition of a 21 per cent stake in Cimpor, which owns and operates a facility in western India,” she added.
Jaypee Cement, with a current capacity of 23Mta, has been scaling up rapidly from being a 9Mt player in FY’08. It is targeting 35.9Mta by FY’12.
It has also been diversifying out of its primary north and central Indian markets like UP, MP and Himachal Pradesh to west and east Indian markets spread across Gujarat and Chhattisgarh.