Hindalco to raise ₹6,000 crore to fund capex

Hindalco Industries, an Aditya Birla Group company, plans to raise ₹6,000 crore through issue of non-convertible debentures on a preferential basis.

The Board will consider raising the fund in one or more tranches.

“The fund raising is to augment resources for the ongoing capital expenditure, refinancing and repayment of existing loans and debentures,” said the company in a statement on Thursday.

Hindalco is in the process of ramping up aluminium production at Mahan in Madhya Pradesh and Aditya Aluminium in Odisha to the targeted capacity of 360,000 tonnes per annum each.

The Utkal Alumina Refinery in Odisha will feed 1.5 mtpa of alumina to both the aluminium facilities.

The ramping up of capacity from the recently completed greenfield projects comes when the aluminium prices are falling due to weak demand.

With the new facilities going on stream, the depreciation cost has started kicking in, while the finance cost is moving up.

The depreciation and finance costs were up 78 per cent each at ₹332 crore and ₹602 crore in the first quarter of this fiscal. The company has a debt of ₹23,000 crore and short-term debt of ₹5,000 crore.

Its net profit was down 67 per cent at ₹107 crore.

The company is focusing on value added products to boost its realisations and is setting up billet and can production facilities near its plant.

It expects three of the four coal mines won in the e-auction to start production by end this year.

The backing of captive coal and bauxite mines has helped Hindalco to stay afloat during difficult times the industry is passing through.

Hindalco’s competitor Vedanta Aluminium has shut production at Kobra in Chhattisgarh and Lanjigarh in Odisha. Vedanta had raised ₹2,000 crore recently through non-convertible debenture.

Shares of Hindalco were down 0.21 per cent at ₹81 on Thursday.

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