Ajanta Group may come out with IPO to fund expansion

Morbi-based Ajanta Group may come out with its maiden initial public offer (IPO) to raise funds for its upcoming cement plant in Kutch district of Gujarat.

Ajanta Group will tap the capital market with a public issue to fund its cement plant project. "The size of the IPO may be in the rage of Rs. 300-Rs. 600 crores. The rest will be raised through a mix of internal accruals and debt", said sources close to the development.

The company plans to set up a cement manufacturing plant with a capacity of around 15 million tonnes per annum in Kutch. The Rs. 700 crore Ajanta Group intends to infuse Rs. 1,000 crore for the proposed project in a phased manner. Overall cost of this plant is about Rs.2,000 crores. The plant is expected to start operations in 2010.

Ajanta also has applied for mining lime. Initially, the plant will have a capacity of three million tonnes per annum, which will subsequently be scaled up to 15 million tonnes per annum. The company has already started hunting for land in Kutch for the cement project.

When contacted, Ajanta Group officials confirmed that the company is considering IPO but not in near future. "In fact, we had also filed Draft Red Herring Prospectus (DRHP) some time ago. Public issue is there on our agenda but we want to concentrate on our power products business at present”, said Jaysukh Patel, managing director, Ajanta Group.

"We will come out with IPO when we require funds, especially for our cement plant projects. Currently the group need not go public. Our priority is to augment our e-bike, CFL and other power products business”, he added. When asked about its plans to launch a public issue in future, Patel refused to divulge details.