IFC to support DCM Shriram's $122 mn capex

Company plans to take brownfield expansion in UP, Rajasthan and Gujarat

DCM Shriram Limited, a publicly listed company, has said it will raise $60 million from International Finance Corporation (IFC). The funds raised will support company's capex to the tune of $122 million in Uttar Pradesh, Rajasthan and Gujarat.

The proposed project includes regular maintenance, capital expenditure would be spread across its various manufacturing facilities in Uttar Pradesh, Rajasthan and Gujarat.

According to IFC's disclosure, company's brownfield expansion includes technology improvement of existing cogen power plant in Ajbapur Sugar factory in Uttar Pradesh leading to higher power generation to the extent of 16.4 Mw, expansion of its chlor-alkali facility located in Bharuch, Gujarat from 450 tpd to 915 tpd capacity and routine annual maintenance capex across its four sugar plants in Uttar Pradesh, its Chemical Complex in Kota (Rajasthan) and its existing chlor-alkali plant in Bharuch.

The company is also planning to take up modernisation of technology of its existing chlor-alkali facility located in Bharuch, Gujarat and Kota, Rajasthan and expansion of captive power plant by 55 Mw to support expansion of chlor-alkali capacity.

Total capital expenditure for the above brownfield expansion is estimated to be $122 million. The proposed IFC investment consists of an A-loan of up to $60 million, with the rest funded through loans from other banks / financial institutions and internal accruals.

DCM Shriram Limited is owned by three Shriram brothers - Ajay S Shriram, Vikram S Shriram and Ajit S Shriram, who have a 63.9 per cent shareholding in the Company.

DCM Shriram Limited has two main business lines including agribusiness (fertilizer, seeds - including international operations under 100 per cent subsidiaries, sugar and trading of agricultural inputs), and Chloro Vinyl (caustic soda, chlorine, carbide and polyvinyl chloride or PVC). The company as presence in Uttar Pradesh, Rajasthan, Gujarat, Telangana and Tamil Nadu. It also has other smaller businesses such as Fenesta Building Solutions (value-added PVC products) and cement to complement its main products and a joint venture with Axiall Inc. for PVC Compounding.

The Project supports the expansion of the chlorine and caustic soda as chemicals, which find downstream uses such as manufacture of aluminium, paper, detergents, agro-chemicals, pharmaceuticals and water purification.