Ambuja Cement India Plans Ipo In 2005

Ambuja Cement India, the holding arm of Gujarat Ambuja Cement for the acquisition of Modi Cement and a 14.4 per cent stake in ACC, is planning to go for an initial public offering (IPO) by 2005 to provide an exit route to the foreign equity holders in the company.

In case the IPO does not materialise, Gujarat Ambuja will have to buy out the equity partners -- AIG and the Government of Singapore Investment Corporation -- which together hold a 40 per cent stake in Ambuja Cement India. Gujarat Ambuja holds the balance 60 per cent.

Anil Singhvi, executive director, Gujarat Ambuja, said, "As per the agreement with our partners, we would offer an exit option to the minority shareholders in Ambuja Cement India through an IPO in the next five years. If that does not happen, we will have to buy out those shares."

 

Ambuja Cement India has made an aggregate investment of Rs 928 crore in acquiring a 14.4 per cent stake in ACC. The arm has also invested Rs 34.50 crore in Ambuja Cement Eastern (the renamed Modi Cement) for its capital expenditure. Consequently, Ambuja India holds a 94.08 per cent share in Ambuja Cement Eastern.

Ambuja Cement India, to meet its future fund requirements, had raised Rs 238.43 crore through a rights issue last fiscal. Gujarat Ambuja had invested Rs 143.06 crore in the issue, while the foreign investors committed Rs 95.37 crore worth investments.

Recently, Ambuja Cement India has put on hold its plan to set up a two-million greenfield project in Andhra Pradesh at an estimated investment of Rs 600 crore.