Hyderabad based Penna Cement Industries, a well-established integrated cement player with a strong brand recall in southern and western states of India, has refiled for its Initial Public Offering to fundraise Rs 1300 Crore via a fresh issue of equity shares and an offer for sale of up to Rs 250 Crore by the Promoter Selling Shareholders, aggregating to Rs 1,550 Crore.
Objects of the Net Proceeds are to Repay/Prepay Rs 550 Crore of certain borrowings availed by the company besides funding capital expenditure requirements of Rs 105 crore for its KP Line II Project, 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 and general corporate purposes.
Incorporated in 1991 and commenced operations in 1994, PCIL offers major variants of cement, including Ordinary Portland Cement, Portland Pozzolana Cement and Portland Slag Cement and stands to be one of the largest privately held cement companies in India. It operates out of 4 ISO certified integrated manufacturing facilities and two grinding units across Andhra Pradesh, Telangana and Maharashtra with an aggregate capacity of 10 MMTPA as of March 31, 2021. It is expected to reach 16.5 MMTPA by FY24.
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, it has commissioned one of the largest port-based cement terminal in India at Krishnapatnam with an automated ship loading facility and packing terminals at Cochin, Gopalpur and Karaikal ports.
In Fiscal 2021, the company's revenue from operations, EBITDA and profit for the year stood at 2,476.39 Crore, ₹ 479.84 Crore and ₹ 152.07 Crore, respectively.
Investment Bankers appointed to the Issue are Edelweiss Financial Services Ltd, Axis Capital Ltd, ICICI Securities Ltd, JM Financial Ltd and Yes Securities (India) Ltd.
Cement industry in India is expected to grow at a CAGR of 6-7% between FY21 and FY26 on account of infrastructure investments, healthy revival of the housing demand and various Government Initiatives.