B K Birla group company Kesoram Industries today said it will infuse Rs 600 crore for acquiring mining land around its cement plant and in its tyre business in the current fiscal.
“We are planning to invest Rs 600 crore in 2016-17. The investment will be towards cement and tyre business,” Kesoram director and CFO Tridib Kr Das said after the AGM here today.
The meeting was chaired by executive Vice-Chairperson Manjushree Khaitan as Chairman B K Birla could not attend due to health reasons.
Das said Rs 350 crore would be towards tyre business out of which Rs 300 crore would be for car radial tyre facility at Balasore.
“The 2.9 million car radial facility will be up for commercial production in April and already Rs 500 crore had been infused and another Rs 300 crore would be spent this year,” he said.
“Another Rs 250 crore has been earmarked for acquiring mining land around its cement plant at Vasavdatta in Karnataka. Though we have a mine land in control that would cater for another 20 years, we have decided to acquire more mining land,” Das.
Demand for cement has not picked up yet but according to analysts bullish days are ahead.
About funding the investment plan, Das said the company was evaluating between raising debt and equity and no firm decision had been taken yet.
The company has been able to bring down its long-term debt to almost half to around Rs 2,200 crore but even then debt equity ratio is unfavourable at 6:1, Das said.
Currently, the company was trying to consolidate and stabilise post tyre plant hive off and it was not considering any divestment including rayon.