The Hindu Business Line : OCL India to raise funds for capacity expansion

The Orissa-based OCL India Ltd, manufacturers of the Konark brand of cement, would be raising funds both through debt and equity for its capacity expansion programme.

The company would be increasing the capacity of the plant, which is located at Rajgangpur, to 3.8 million tonnes per annum from 1.8 million tonnes per annum.

Total cost of the capacity expansion programme has been pegged at Rs 700 crore. Talking to Business Line, Mr Rakesh Malhotra, Chief Finance Officer, said that the funds would be raised through both the avenues.

"All options are open before us. We would consider all the instruments available in the market either for raising debt or equity. Details of it would be ready within the next 10-15 days," Mr Malhotra said.

According to him, the funding plan would be prepared by an in-house team. The project would be completed and commissioned within the next 28 months. Regular internal accruals of the company would also be utilised in the capital expenditure programme.

When queried whether OCL India would consider a rights issue (for the equity portion) or an ECB (for the debt portion), he said, only the best and cheapest option would be availed.

OCL has also decided to set up a power plant, but Mr Malhotra clarified that only preliminary exercise has started. "No decision has been taken on this matter," he said.

For the proposed integrated steel plant (of 0.25 million tonnes per annum capacity), OCL is still talking with the Orissa Government for an iron ore mining licence. OCL had signed a MoU with the State Government for this purpose in November 2004.

Meanwhile, for the quarter ended March 31, 2006, OCL's sales increased by 23 per cent to end at Rs 207.25 crore, against Rs 168.75 crore in the corresponding quarter of the previous financial year, 2004-06. Net profit jumped to Rs 11.56 crore from Rs 9.48 crore.

The company ended 2005-06 with sales of Rs 700.82 crore, against Rs 570 crore in the previous fiscal. Annual net profit increased to Rs 37.79 crore from Rs 28.17 crore.