To meet the expenses of its future expansion plans, Kesoram Industries Ltd on Thursday increased its borrowing limit to Rs 2,000 crore from Rs 1,000 crore.
Shareholders of the company at its 87th annual general meeting (AGM) approved it. Mr BK Birla, Chairman of Kesoram Industries, however, said that it was just an enabling resolution.
According to Mr Birla, the funds would be utilised for the expansion projects of the cement and tyre units. Currently the capacity expansion of the cement plants is being funded through internal accruals.
Mr Birla also said that the funds would be taken as debt from domestic banks and financial institutions. He ruled out any sort of equity issue or ECB (overseas commercial borrowing).
The Vasavadatta Cement division of Kesoram Industries has undertaken an expansion programme, whereby capacity will be increased by 1.25 million tonnes per annum of clinker and 1.65Mta of cement.
With the completion of this expansion programme, Kesoram Industries’ total cement capacity (which would include Kesoram Cement) would increase to 5Mta.