JK Cement to go public in Feb

Firm plans to augment captive power generation facility and increase cement production

JK Cement today said it would come out with a public offer to raise about Rs 280-300 crore for funding expansion plans, including augmenting captive power generation capacity and increasing cement production.

"We hope to raise around Rs 280-300 crore through a public offer which is likely to hit markets by the second week of February," J K Cement group Executive President RG Bagla told reporters here, adding the draft prospectus had been filed with market regulator.

He said the company would utilise a little over Rs 200 crore for setting up captive power plants and about Rs 30 crore for increasing the production capacity of both grey and white cement facilities.

Elaborating on the power generation plans, Bagla said the company would install a 13-Mw waste-heat recovery power plant, costing about Rs 111 crore, and a 20-Mw petcoke-based power plant with an investment of Rs 85 crore at its production facility at Nimbahera in Rajasthan.

"These power plants are expected to be operational by 2008," he said.

The company will also replace an existing 7.5-Mw turbine with a new 10-Mw turbine at Bamania, Rajasthan, which will cost around Rs 8.5 crore, he added.

"These power projects will provide us access to an additional 43-Mw of captive power which is equivalent to 86 per cent of the company's requirements," Senior Vice President (finance, tax and management services) Anil Agarwal Said.

He said the installation of additional capacity would nearly halve the per unit cost of power for the company to Rs 2.20 per unit from the existing Rs 4.5 Bagla said J K Cement will also increase the grinding and production capacity at the grey cement plant at Nimbahera by 0.45 mtpa (million tonnes per annum) with an investment of about Rs 22.5 crore.

Besides, it would also increase the production capacity of the white cement unit located at Gotan, Rajasthan, by 0.1 mtpa with investment of Rs 9 crore.

"The expanded capacity of grey cement would be 4 mtpa, and that of white cement 0.4 mtpa," Bagla said, adding the expansion was likely to be completed by June this year.

"Some of the funds will be utilised for general corporate purposes," he added.

JK Cement's net profit for the quarter ended December 31 2005, was Rs 7.8 crore, while in the nine months of the current fiscal, it stood at Rs 16.20 crore.