Cement producer Penna Cement has filed its draft red herring prospectus with the Securities and Exchange Board of India for an IPO worth Rs 1,550 crore. The public issue comprises a fresh issue of shares worth Rs 1,300 crore and an offer-for-sale by promoters, PR Cement Holdings Ltd of up to Rs 2,500 crore. The company has planned to utilise the net proceeds for repayment of Rs 550 crore of certain borrowings availed by the company, funding capital expenditure requirements of Rs 105 crore for its Krishnapatnam line II (KP Line II) project, Rs 80 crore towards upgrading its raw grinding and cement mill in Talaricheruvu, Rs 110 crore towards setting up a waste heat recovery plant in Tandur, and Rs 130 crore for setting up Talaricheruvu WHR plant.
Key things to know about Penna Cement IPO
– The listed industry peers of Penna cement include UltraTech Cement, Shree Cement, Ambuja Cements, ACC Ltd, Dalmia Bharat, The Ramco Cements, India Cements, Birla Corporation, JK Cement, JK Lakshmi Cement, Orient Cement and Sagar Cement.
– The highest industry P/E ratio (Dalmia Bharat) is 130.30, and the lowest industry (Birla Corporation) P/E ratio stands at 14x, hence, the average P/E ratio is 41.30x.
– The global coordinators and book running lead managers to the issue include Edelweiss Financial Services, Axis Capital, ICICI Securities, JM Financial and YES Securities. The registrar to Penna Cement is KFin technologies Private Ltd.
– At the end of March 31, 2021, Penna Cement’s revenue from operations stood at Rs 2,476.4 crore. The company posted a net profit of Rs 152.1 crore in the financial year. The company’s cement products include ordinary portland cement, Portland pozzolana cement and portland slag cement.
– Although the ongoing COVID-19 pandemic has significantly affected the global economy, Penna Cement said that it was not significantly impacted by the COVID-19 pandemic, and accordingly, its revenues from operations increased by 14.25 per cent from Rs 2,167 crore in fiscal 2020 to Rs 2,476 crore in the fiscal 2021.
– Penna Cement operates integrated manufacturing facilities and grinding units across Andhra Pradesh, Telangana, and Maharashtra with an aggregate capacity of 10 MMTPA as of March 2021, and the capacity is expected to reach 16.5 MMTPA by FY24.