Murli Indst to dilute stake to partly-fund 3 cement plants

Nagpur-based diversified business group, Murli Industries today said it may dilute equity at the company level or project levels to partly- finance the Rs 3,600 crore investment in its three cement plants.

The company with interests in eight business segments including edible oils and power, had earlier announced plans to set up cement plants of three million tonne per annum capacity each in Rajasthan, Karnataka and Gujarat.

"We plan to fund these projects with a debt-equity ratio of 70:30. While we are in talks with banks for the debt part, we may dilute equity stake in the company or at the Special Purpose Vehicle level, apart from partly-funding with internal accruals," Murli Industries Chief Financial Officer A M Chandak told PTI.

As on March-end 2010, promoters hold 54.59 per cent stake in the company. Chandak said the company had a Rs 80 crore cash surplus, which was likely to go up to Rs 250 crore by the end of the current fiscal.

Murli Industries, which runs a three million tonnes per annum cement plant at Chandrapur in Maharashtra has acquired land in Rajasthan and Karnataka and work on cement plants will start in the next three months. They are to be completed within three years.

The company, however, is still scouting for land in Gujarat for its cement plant. "We are yet to get the land for the Gujarat project, but it is likely in the next nine months. The project may take three years from there on to go on stream," Chandak said.

"All three projects will have 50MW of power plants each," he added.

 When asked about reasons for the new capacity addition, Chandak said India's cement consumption would grow in sync with the increasing demand from infrastructure and housing sectors.

However, company's Chandrapur plant in Maharashtra is running on only 40 per cent of its capacity level and the full capacity utilisation is not expected before August-end.