Saturday, Nov 27 2021 | Time 13:59 Hrs(IST)
Business Economy

Penna Cement Industries gets Sebi approval for Rs 1,550 crore IPO

Hyderabad, Oct 18 (UNI) Hyderabad-based Penna Cement Industries on Monday announced it has received approval from capital markets regulator Securities and Exchange Board of India (Sebi) to go ahead with its Rs 1,550-crore Initial Public Offering (IPO).
The IPO includes a fresh issue of Rs 1,300 crore and an offer for sale of up to Rs 250 crore by its promoter PR Cement Holdings, the company said in a release here.
Currently, P R Cement Holdings holds a 33.41 per cent stake in the company.
Penna Cements plans to utilise part of the fresh capital raised for repayment of Rs 550 crore of certain borrowings besides funding capital expenditure requirements of Rs 105 crore for its KP Line II Project.
The firm will use Rs 80 crore towards upgrading its raw grinding and cement mill in Talaricheruvu, Rs 110 crore and Rs 130 crore towards setting up a waste heat recovery plant in Talaricheruvu and Tandur, respectively, the DRHP (Draft Red Herring Prospectus) said.
Set up in 1991, the Hyderabad-based company is promoted by P. Prathap Reddy, Pioneer Builders and P R Cement Holdings Limited.
Penna Cement which has a strong brand recall in the southern and western states of India, operates out of four integrated manufacturing facilities and two grinding units across Telangana, Andhra Pradesh and Maharashtra with an aggregate capacity of 10 mmtpa as of March 2021, and its capacity is expected to reach 16.5 mmtpa by fiscal 2024.
In FY21 it met 53 per cent of its power requirements from captive sources, the release said.
In May 2019, the company acquired Singha Cement, a Sri Lankan Cement Company that operates a packing terminal in Colombo, to augment its focus on having a port-based distribution strategy.
Additionally, in March 2018, it commissioned one of the largest port-based cement terminals in India at Krishnapatnam with an automated ship loading facility and packing terminals at Cochin, Gopalpur and Karaikal ports.
Recently Union Minister Sarbananda Sonowal inaugurated a bagging and bulk cement terminal at Syama Prasad Mookerjee Port.
In FY21, the company’s Revenue from operations stood at Rs 2,476.4 crore, while its operating profit was at Rs 479.8 crore.
Axis Capital Limited, ICICI Securities Limited, Edelweiss Financial Services Limited, Yes Securities (India) Limited and JM Financial Limited are the bankers to the IPO.
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