Shriram to consolidate presence in Indian cement sector
Shriram EPC, a publicly held company of Shriram Group, recently entered the cement sector by acquiring majority stake in Sree Jayajothi Cements and, according senior officials, a blueprint is being prepared to see how they can grow in this sector,
The Business Standard of India reports that as a first step, Shriram EPC which controls Sree Jayajothi Cements, is raising INR400 crore through the private equity (PE) route for deployment in the cement firm.
Senior officials of Shriram Group confirmed that they were in wide ranging talks with various PE players to raise this sum. Investment bankers also indicated the group may have had discussions with Italcementi Group for a strategic partnership. However, Shriram Group officials denied any such discussions.
Shriram's foray into this capex heavy sector was the fallout of a large amount of dues from the cement firm.
“We had an option of converting this into equity if they delayed the payment beyond a point. They had been delaying the payment for a long time, so we decided to convert the dues to equity in February 2012,” a Shriram Group official said.
The company’s cement manufacturing facility is at Yanakandala village near Banaganapalli in Kurnool district of Andhra Pradesh. It has a combined clinker capacity of 2Mta and a cement grinding capacity of 3.2Mta.