India Cements Board approves Rs 500 cr QIP, FCCB issue

Chennai: Board of India Cements has approved a proposal to raise Rs 500 crore through qualified institutional placements or foreign currency convertible bonds to meet capital expenditure needs, a top official said today. “The Board has approved the proposal for raising an amount not exceeding Rs 500 crore by way of issue of QIP/FCCB/GDR or other Securities to improve the leverage and for meeting normal capital expenditure,” India Cements Ltd Vice-Chairman and Managing Director N Srinivasan said at the company’s 68th Annual General Meeting held here. [caption id=“attachment_1419845” align=“alignleft” width=“380”]  Representational Image[/caption] “We have approached the shareholders for approval in this regard,” he said. The company is taking all measures at the operational level to improve the performance in the remaining part of the current financial year, he said and expressed hope that the investment activity would pick up in the coming months following a stable Government at the Centre and thrust on infrastructure development. “During the first half of current financial year, total sales volume including clinker and exports stood at 49.08 lakh tonne compared to 50.89 lakh tonne in the corresponding period of previous year,” he said on the performance of the company. “With an improvement in selling prices, the overall EBIDTA for six months was at Rs 350 crore against Rs 329 crore in the first half of last year. The company returned to black in second quarter reporting a net profit of Rs 7.49 crore,” he said. The performance of India Cements in 2013-14 can be considered to be “satisfactory” by maintaining the capacity utilisation, Srinivasan said, adding that it maintained overall sales, including clinker at 100.37 lakh tonne as compared to 100.55 lakh tonne in previous year. “Total revenue including other income for the year stood at Rs 4,529.84 crore against Rs 4,615.67 crore in previous year. The erosion in top line and higher cost of production resulted in lower operating profit of Rs 594.20 crore as compared to Rs 841.95 crore in 2012-13”, he said. In 2013-14, the company’s new 48 MW power plant at Vishnupuram in Telangana was commissioned and it helped to reduce the overall power cost with lesser off-take of high cost open access power. “The existing power plant at Sankar Nagar in Tamil Nadu also stabilised at higher levels of operation, yielding further economies,” he said. He said the installed capacity of cement in the country grew by 15 times in last 30 years to 360-365 million tonne of which South accounts for 40 per cent share. “Till five years ago, when the economy did well, the cement industry clocked a double digit growth. With the economy registering sub five per cent, the cement industry took a hit with practically nil growth in last year,” he said. The capacity utilisation for the whole of India was around 71 per cent while it was still lower in South, which is “saddled with excess capacity and the severe competition pushed down the cement prices”. “It is hoped that Reserve Bank of India will consider revising lending rates in New Year to spur investment activity as core and retail inflation rates have considerably declined,” he said. PTI