The Hindu Business Line : Binani Cements eyes capital market entry with public issue

LAUNCH PAD: Mr Braj Binani, Chairman, Binani Cement Ltd, and Mr D. Sundararajan, Executive Director, announcing the company's IPO in Mumbai on Friday. - Shashi Ashiwal

Mumbai April 27 Binani Cement Ltd, a subsidiary of Binani Industries Ltd will enter the capital market with a public offer of 2.05 crore equity shares of Rs 10 each through an offer for sale by JP Morgan Special Situations (Mauritius) Ltd.

The offer is through a 100 per cent book building process and the price band has been fixed between Rs 75 and Rs 85 per share.

The offer opens on May 7 and closes on May 10 and constitutes 10.09 per cent of the post-offer paid-up capital of the company.

JP Morgan, which earlier held 25 per cent of the equity will now hold 15 per cent.

At least 60 per cent of the offer will be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs) of which 5 per cent will be available for mutual funds.

Up to 30 per cent will be given to retail individual bidders and up to 10 per cent will be allocated to non-institutional bidders.

The company will not raise any money from the issue, as it is an offer for sale.

The company has facilities to manufacture 5.3 MTPA of cement at Sirohi, Rajasthan.

The company has increased the clinker capacity at its plant by 2.3 MTPA. It will add another 44.6 MW captive power plant to the existing 25 MW coal-lignite based plant. The total cost of the two projects is estimated at Rs 575 crore.

JP Morgan Special Situations (Mauritius) Ltd had invested Rs 120 crore in September 2005 for acquiring equity shares and extended a term loan of Rs 130 crore for expansion of the cement capacity.

The company reported a total income of Rs 496.4 crore for the nine months ended December 2006 and profit after tax of Rs 70.1 crore.

ICICI Securities Ltd is the book running lead manager to the issue and JP Morgan India Pvt. Ltd is the co-book running lead manager to the issue.

Binani Cement has presence in Rajasthan, Haryana, Delhi and Gujarat with an overall market share of about four per cent.