Shares of Shree Cement advanced 4.15 per cent to Rs 20,854.75 on the BSE on Wednesday after the company opened its Rs 3,000-crore qualified institutional placement (QIP) offer on Tuesday, fixing the floor price at Rs 19,806.46 per share.
At 10:17 AM, the stock was trading 1.5 per cent higher at Rs 203,37.6 apiece, as against a 0.67 per cent in the benchmark S&P BSE Sensex.
“The proceeds from the QIP will be used for all corporate purposes. We have taken approval for a maximum amount of Rs 3,000 crore; it is a dynamic world and the need for funds change,” H M Bangur, managing director at Shree Cement said. However, Bangur did not specify how the funds would be used.
The firm has already chalked out an investment of Rs 948 crore towards greenfield expansion. A 3 million-tonne per annum (mtpa) plant at an investment of Rs 432 crore has been lined up at Athagarh, Odisha, which will boost its market share in the east while another 3 mtpa plant at Patas in Maharashtra is underway at a projected investment of Rs 525 crore.
The company is likely to offer discounts on the floor price in accordance to the decisions of the QIP committee it has formed. A decision on the same is likely to be taken on Friday, November 22. READ HERE
India's third-largest cement producing company has been hit by a prolonged monsoon season and falling cement prices on the back of the ongoing economic slowdown.
In the recently concluded quarter, Shree Cement turned out to be an exception regards the sales volume growth. While other large cement producers such as UltraTech Cement Ltd, ACC Ltd and Ambuja Cements Ltd saw their sales volume decline, the Rajasthan-based cement maker’s sales volume grew marginally at 1.5 per cent to 5.72 million tonnes. Further, net realizations rose 9 per cent to Rs 4,654 per tonne from a year earlier. The company’s profit also rose over five times to Rs 309 crore YoY.