Hyderabad-based Penna Cement has filed draft papers with capital markets regulator Sebi to raise Rs1,550cr through an initial public offer (IPO). This IPO consists of fresh issuance of shares worth Rs1,330cr along with an offer for sale of up to Rs250cr by the company’s promoter PR Cement Holdings, as per the draft red herring prospectus (DRHP) filed with Sebi.
Further, the company’s public issue will be managed by Edelweiss Financial Services, IIFL Holdings, JM Financial and Yes Securities.
The funds will be used for expansion and paying off the company’s debt. Penna Cement is spread across Andhra Pradesh, Telangana, and Maharashtra and boasts of a total capacity of 10MT.
Now, as per media reports, the company’s expansion plan entails an expenditure of Rs3,500cr to start a greenfield project in the north and build port-based facilities in Odisha and Kolkata to enter the northern and eastern markets.
Incidentally, in the past few months, housing and infrastructure revival has prompted a handful of mid-sized cement firms to consider expansion, and in recent times, many have resorted to raising funds through the equity markets.