Burnpur Cement Limited is entering Indian primary market with a Public issue of 3, 18, 25,100 equity shares of Rs.10 per equity share aggregating to Rs. 3182.51 lacs (at the lower end of the price band of Rs.10/-per equity share) and Rs. 3819.01 lacs (at the higher end of the price band of Rs. 12/- per equity share). Below are the salient features of this issue:
Business of the Company
Burnpur Cement Limited (BCL) is one of the established cement?manufacturers of Eastern India having its market presence in West Bengal, Jharkhand and Bihar. The Company started operations in the cement industry in October 1991 with a small cement plant of 30 TPD. The Products of the company are approved and accredited with Quality Standards with BIS Certification. The quality standards ensure that the quality of cement manufactured by the Company is as per Industry norms.
Mr. Ashok Gutgutia, aged 46 years is a Graduate of Commerce from University of Ranchi and is an MBA from Indian Institute of Business Management, Patna. He is one of the promoters of the Company. Mrs. Shashi Gutgutia aged 37 years is a Non-Executive and Non ????Independent Director of the company is also promoter of the Company.
Burnpur Cement Limited is a profit making company. For the FY ended March 31, 2006, the company clocked a turnover of Rs. 23 crores. The restated net profit for the same period was about Rs.89 lacs. For FY 2007, till Dec?2006, company had clocked a turnover of Rs.11 crores and PAT of Rs.32 lacs. For FY 2005 and FY 2004, the top line was Rs. 12 and Rs. 9 crores approximately. The net profit for FY 2005 was Rs. 43 lacs and for FY 2004 net profit was Rs. 15 lacs.
Particulars of the Issue
The Face Value of the Equity Share is Rs. 10/- and the Issue Price is (.) times the face value of the Equity Share. The price band is Rs. 10/- to Rs. 12/- per equity share of Rs. 10/- each.
Basis for Issue price
The Company is one of the established players in Cement sector of Eastern India having its market presence in West Bengal, Jharkhand and Bihar. The Company has a technically qualified management team led by promoters having rich experience in Cement industry. The company has already a grinding unit for manufacture of cement for a capacity of 1,000 TPD located in Asansol district of West Bengal.
Objects of the Issue
Main object is to set-up an integrated Clinkerisation and Cement grinding plant of 800 TPD capacity which can be expandable to 1600 TPD in the Hazaribagh district of Jharkhand at Patratu Industrial Estate, for manufacturing Clinker, Ordinary Portland Cement (OPC), Portland Pozzolona Cement (PPC) and Portland Slag Cement (PSC). Other objective is to provide liquidity for existing shareholders by listing the stock on exchanges.
Following are the key risks which can impact company?s performance:
1.The company?s business is dependent upon its ability to source sufficient limestone for its operations.
2. The Company is dependent upon the continued supply of coal, gypsum and other raw materials and fuel, the supply and costs of which can be subject to significant variation.
3. Rise in Input Costs may affect profitability.
4.Taxes and other levies imposed by the Government of India or State Governments relating to the Company?s business may have a material adverse effect on the demand of its products.
5. After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop.