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| UltraTech plans public offer to fund expansion |
| Abhineet Kumar & Chandan Kishore Kant / Mumbai Oct 04, 2009, 00:51 IST |
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UltraTech is planning a follow-on public offer to fund the expansion of its cement business. The fund-raising exercise is likely once the restructuring of the business, announced today, is over.
The company has an investment plan of Rs 15,000 crore over the next five years to add about 25 million tonnes of capacity.
“The idea of the restructuring is to create a platform which will help in raising funds through a follow on public offer,” said D Muthukumaran, head (group corporate finance), AV Birla Group. “Grasim can bring down its holding to 51 per cent in the follow-on public offer. But it will take time.”
The cement business of the group is currently valued at a discount of 10 to 15 per cent to its peers such as ACC and Ambuja, which are owned by Holcim of Switzerland, because of the risks related to Grasim’s other businesses such as viscose staple fibre.
“Once the cement business comes under one entity, we will bridge the gap in valuation,” said Raj Balakrishnan, MD (M&A), DSP Merrill Lynch.
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