Kolkata-based cement manufacturer, Shree Cement, is set to raise around Rs 100 crore through external commercial borrowings. The company has recived an AA+ sovereign rating to raise debt from the foreign market.
The company would raise around Rs 300 crore in total from both external debt and internal accrual to fund its power and cement business.
?In the next one year, we expect the power business to contribute at least 20-25% to our total sales from the existing 7-8% and that would help the EBIT margins to remain or increase from the current 40% levels,?
K Singhi, executive director at Shree Cement, said.
Singhi also said that the company plans to ramp up its cement manufacturing capacity from existing 10 million metric tonne to 20 million metric tonne by next fiscal.
Singhi added that the cement business currently operates at 40% operating margins, which is the highest level in the industry, and the power business operates at a range of 40-50% margin.
The company has lined up Rs 2,000 crore as capital expenditure plans for the power business and has already raised a debt of Rs 300 crore.
The company currently has 120 mega watt capacity and uses 85 mega watts for its personal consumption and rest it sells in the market.
Shree Cement has seven power units in Rajasthan in the districts of Beawer and Ras. It is setting up power plants with a total capacity of 145 mega watt, of which 45 mega watt would comprise waste heat recovery units which would be generated from low costs.