Century Ply plans QIP, to list cement outfit

Written by Sumit Moitra | Kolkata, Oct 30 | Updated: Oct 31 2007, 07:49am hrs
Century Ply Ltd is planning to raise close to Rs 170 crore by disinvesting 15% of the equity to strategic investors through the qualified institutional placement (QIP). Its subsidiary Cement Manufacturing Company Ltd is entering the capital market through an initial public offer (IPO) to raise Rs 200 crore to fund the company's expansion plans.

"We will be diluting the promoter's holding in Century Ply from the present 90% to 75% through the QIP route to comply with the Securities & Exchange Board of India regulations. The move, at the current price level of Rs 500 a share, will help us raise Rs 170 crore, which will be used to fund the company's new projects. For CMCL, we will be going for an IPO to part fund its expansion and green field projects," Century Ply managing director Sajjan Bhajanka said.

According to Bhajanka, Century Ply requires close to Rs 400 crore for two medium density fibre (MDF) board plants in Punjab and Uttaranchal. Out of that, around Rs 170 crore will come from the QIP offering.

Apart from MDFs, Century Ply is a leading player in plywoods, laminates and decorative vaneers. The company will be investing around Rs 200 crore in each of the MDF projects.

Century Ply's subsidiary CMCL, which has a plant in Meghalaya, owns the Star Cement brand, considered to be the highest selling brand in northeast. It has further expanded its cement business with 1m tonne cement grinding unit at Kahalgaon in Bihar and one 1mt plant at Patratu in Jharkhand. A 2mt plant in Meghalaya is now being planned.

"For our cement projects, we need around Rs 400 crore, of which Rs 200 crore will come from internal accruals. The balance will be raised through an IPO," Bhajanka said.