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| Edited By: Ashish K Tiwari |Source: DNA |Updated: Mar 16, 2018, 05:21 AM IST
India Cements has earmarked a capital outlay of Rs 600 crore to get Indo Zinc’s cement plant in Rajasthan up and running by mid-2010. The company expects its holding to shoot up significantly post the capital infusion, thereby easing the process of merging it with the parent company.
According to N Srinivasan, vice-chairman and managing director, India Cements, the company has already acquired 53% in Indo Zinc for Rs 5.3 crore. “We plan to pump in Rs 600 crore for the Rajasthan project. Once capital infusion is done, our holding in the company will increase significantly. The plan then would be to merge it with the parent company,” he said.
The Rs 600 crore outlay also includes allocation for a 20 megawatt power plant. The equity component for this investment is pegged at Rs 300 crore. The balance will be through debt and other financial instruments.
Meanwhile, India Cements’ greenfield plant which was to come up in Himachal Pradesh may take longer to set up. “A lot of infrastructure still needs to be provided for, including 30 km of mountainous roads and substantial power supply. A final decision will be taken on that plant once we have a clear idea on what we can get from the state in terms of infrastructure,” said Srinivasan.
Investments in other areas of business include allocation of Rs 500 crore for two power projects — one each in Tamil Nadu and Andhra Pradesh — with a capacity of 50 mw each. The company is looking at total capital expenditure of Rs 1,500 crore for FY10 and FY11.
For the first quarter of FY10, the company posted a 9% increase in revenues at Rs 953.48 crore, while net profit rose 2% to Rs 144.28 crore. Operating profit margin, however, declined 4 percentage points to 30%. While the financials were largely in line with expectations, the dent in company’s profit after tax (PAT) were caused due to higher input costs.
India Cements said demand growth was flat in Andhra Pradesh while it was good Tamil Nadu and Kerala. It expects cement prices to be same or slightly better the rest of the year.
