JSW, Birla in the race to buy out R-Infra cement biz, stock sizzles
Mayuresh Deshmukh / 29 Dec 2015
Debt ridden R-Infra is looking to sell its cement business, joining a list of conglomerates that dabbed in cement business over the years but eventually chose to exit.
According to media report Anil Ambani controlled Reliance Infrastructure (R-Infra) received three final bids for its cement business. JSW cement, Birla Corporation and Blackstone are among the bidders approached to take over. Debt ridden R-Infra is looking to sell its cement business, joining a list of conglomerates that dabbed in cement business over the years but eventually chose to exit.
Reliance Cement, a fully owned subsidiary of Reliance Infrastructure started operations in 2007. The total cement capacity of the company is of 5.6 million tonnes. The units of the company are in Madhya Pradesh Uttar Pradesh's Kundaganj and Maharashtra.
Almost all the bids received are in the range of Rs 4000-4200 crore enterprise valuation. Below the company's expected Rs 5000 crore valuation. Last month R-Infra said it would sell its cement assets by March to focus on its newer defence business.
On the financial front R-Infra's operating revenue decreased by 9.64 per cent to Rs 17198 crores in FY15 from Rs 19033 crores in FY14. The EBITDA of the company stands at Rs 2911 crores in FY15 an increase of 3.73 per cent from Rs 2806 crores in FY14. The net profit stands at Rs 1384 crores in FY15 a decrease of 25 per cent from Rs 1840 crores in FY14. Total debt of the company stands at Rs 24096 crores for FY15 an increase of 3.69 per cent from FY14. The debt burden of the company stands at 34 per cent of total assets.
The sale of cement business will help the R-Infra to reduce part of debt and improve financials. Further it will also help the company to improve to focus on its newer defence business. The share price of the company is trading at Rs 508.60. An increase of 3.58 per cent from the previous close.
With Reliance a host of Indian groups like Essar, Videocon, Lanco, GMR, GVK and Jaypee Group are selling assets to repay debt.
R-Infra is a utility company, having presence across the value chain of power businesses, such as generation, transmission, distribution and power trading. It operates through two segments: Power, and Engineering, Procurement, Construction (EPC) and Contracts. RInfra generates over 941 megawatts of power through its approximately five power stations and distributes power to over 64 lakh consumers in Mumbai and Delhi.
If you want to stay updated with the share market news today, keep a close watch on the indian stock market today with real time movements like sensex today live and overall stock market today trends. Investors tracking ipo allotment status, ipo news today, or the latest ipo india can also follow daily updates along with bse share price live data. Whether you are learning how to invest in stock market in india, preparing for a market crash today, or searching for the best stocks to buy in india, insights on top gainers today india, top losers today india, trending stocks india and long term stocks india help in making informed investment decisions.