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Sagar Cements to raise up to 300 crore to fund expansion
City-based Sagar Cements Limited will be raising up to Rs 300 crore by way of issuance of securities, including a little over 6.1 lakh equity shares of Rs 10 each on a preferential basis, to the promoter and the promoter group to implement its expansion plans.
Hyderabad: City-based Sagar Cements Limited will be raising up to Rs 300 crore by way of issuance of securities, including a little over 6.1 lakh equity shares of Rs 10 each on a preferential basis, to the promoter and the promoter group to implement its expansion plans.
The company plans to expand the capacity of its grinding unit at Bayyavaram in Anakapally, Andhra Pradesh, to 1.5 million tonne, from the current 300,000 tonne with an investment of Rs 167 crore, besides setting up a 15-MW coal-fired captive power plant at a cost of Rs 76 crore at its plant at Mattampally in Telangana.
“The proposal of the board for such fundraising is subject to the approval of the shareholders and other approvals as may be required under the applicable laws. The proposed expansion is expected to be completed by December 2018,” Sagar Cements said on Thursday.
To meet the demand for blended cement in Andhra Pradesh, West Bengal and Odisha and northeastern States, the company plans to expand the capacity of the grinding unit at Bayyavaram, which is being acquired, according to Sagar Cements.
“This will enable the company to transport the surplus clinker available at the Mattampally unit to the said grinding unit for cement production to cater to these markets, which will optimised. We believe that the grinding unit can meet the slag requirement for its cement production from the nearby steel plants in Vizag,” it added.
Stating that the captive power plant proposed at the Mattampally plant is expected to result in the reduction of power costs, the company said it would also ensure consistent supply of power.
Meanwhile, Sagar Cements on Thursday reported a 71.5 per cent decline in its net profit to Rs 2.5 crore for the second quarter ended September 2016, as compared with Rs 8.78 crore in the year-ago period. Its net income stood at Rs 138.27 crore during the quarter under review, as against Rs 187.8 crore in the corresponding quarter of the previous year, reflecting a decline of 26.37 per cent.
“While higher offtake and steady prices helped in maintaining the revenue momentum, better operational efficiency resulted in delivering strong profitability.
Commissioning of railway siding, coupled with synergy benefits from BMM Cements, has resulted in lowering our operational cost as the same has not only resulted in improving our rail-road mix but has also aided us in lowering our freight cost by helping us reach our target markets in a timely and cost effective manner, Sreekanth Reddy, Executive Director of Sagar Cements, said in a statement.
Looking ahead, the government’s push towards infrastructure projects, individual low-cost housing coupled with a pickup in private investment should help improve the demand scenario, he added.
