Binani Cement is entering the capital market with a public offer of 2.05 crore equity shares of Rs 10 each within the price band of Rs 75-85.
"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 today.
The company, with a current capacity of 2.3Mt of cement, aims to take production to 10-12Mt over the next few years.
The IPO will open on May 7 and close for subscription on May 10 with the offer constituting 10.09 per cent 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 per cent of the company’s equity.
"Post-issue JP Morgan will hold 15 per cent of the equity. BIL holds 65 per cent while Credit Suisse First Boston holds the remaining 10 per cent of the company’s shares," he said.
The offer will be through 100 per cent 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.
"In next 3-4 years time, we are looking at 10-12Mta of capacity. Apart from increasing production capacity of our current plant in Rajasthan to 6Mta 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 5.3Mt by next month with an
investment of Rs 5,750m. The money for the expansion plan 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 utilised 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 are looking at the east India markets with one of our new plant slated to be there," he said.
The company recorded total sales of Rs 7,820 million and profit after tax of Rs 956m for fiscal 2006-07, he said.