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Kolkata-based Emami Cement has filed draft prospectus with capital market regulator SEBI, seeking permission to launch its maiden public offer. The INR1,000 crore (INR10 billion) Emami Cement IPO will be split equally between a fresh issue and an Offer For Sale (OFS).
The company – a leading cement manufacturing player in Eastern India – plans to use the IPO proceeds towards debt reduction (INR400 crore) and general corporate purposes. The OFS will be led by promoters Dr Radhe Shyam Agarwal, Dr Radhe Shyam Goenka, Aditya Vardhan Agarwal, Harsh Vardhan Agarwal, Bhanu Vyapaar Private Limited, Diwakar Viniyog Private Limited, and Suntrack Commerce Private Limited.
The company has no external investors and promoters and promoter group own 99.98% equity shareholding.
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Emami Cement IPO will be managed by IIFL Holdings Limited, Axis Capital Limited, CLSA India Private Limited, Edelweiss Financial Services Limited and Nomura Financial Advisory and Securities (India) Private Limited.
Emami Cement IPO: Focus on Eastern India
Emami Cement is part of the INR16,000 crore Emami Group which has interests in infrastructure and paper apart from the flagship consumer goods business. The company has an installed manufacturing capacity of 5.60 million metric tonne per annum through three cement manufacturing plants in Risda, Chhattisgarh; Panagarh, West Bengal; and Bhabua, Bihar.
Emami Cement accounted for 6% of cement manufacturing capacity in Eastern India during FY2018 while it had a market share of 5% in cement sales volume during the quarter ended 30 June 2018. It caters to retail and institutional customers in the states of West Bengal, Chhattisgarh, Odisha, Jharkhand, Bihar, Maharashtra and Madhya Pradesh. Its distribution network comprises of over 2,200 dealers and over 5,000 retailers in approximately 160 districts.
Emami Cement IPO: Profitability on back burner
Having started operations in 2016, Emami grew through rapid investments and acquisitions. Since recent years have been marked with investments, profitability has taken a back seat. The company posted revenue of INR1,027 crore and booked a loss of INR77.7 crore in FY 2018. However, it swung to a profit of INR18.1 crore on a top line of INR473.5 crore in the first quarter of FY2019.