Kesoram eyes Rs 500cr EBITDA in FY22, debt-free tag

Kolkata: Manjushree Khaitan-led

Kesoram Industries

is confident to achieve an EBITDA of Rs 500 crore for the current financial year and hopes to become almost debt-free in the next couple of years. It is also planning to become a 13-million-tonne cement company in the next few years.

Kesoram CEO

P Radhakrishnan

disclosed this to TOI on Friday after the board meeting of the company which has now become predominantly a cement outfit after demerger of tyre business into a new entity Birla Tyres.

The city-based company has come back into the black in the fourth quarter of 2020-21 with a net profit of Rs 52.1 crore from a loss of Rs 453 crore in the same period last year. The revenue of the company has also doubled to Rs 806 crore from Rs 498.8 crore in the year-ago period. The board of

Kesoram

has also approved equity raising to the tune of Rs 600 crore out of which Rs 200 crore would be raised through a rights offer.

“Initially, we shall go for rights issues and later would look for other equity instruments. The fund raised through this will be primarily used to reduce debt,” he added. According to him, Kesoram now has a debt of Rs 1,842 crore. After the rights issue, it was reduced to Rs 1,642 crore and after the remaining equity issue, it would settle at Rs 1,300-1,350 crore.

“With the kind of EBITDA we are expecting, we should be able to reduce debt further,” he added.

Commenting on cement capacity expansion, he added that it has a capacity of 7.5 million tonne and 60% of this is OPC (ordinary Portland cement). “By making blended cement (PPC, PSC), we can easily raise it to over 8 million tonne and then shall look for capacity expansion further,” he added.

In March this year, Kesoram had completed the debt restructuring making itself free from bank debt. Earlier, the company had converted some portion of its debt of lenders to equity. The company had allotted Rs 459 crore of optionally convertible debentures (OCD) and Rs 1,600 crore of non-convertible debentures to Goldman Sachs, Sarvara Investment Fund of Cerberus Capital Management,and Edelweiss group along with others.

Main lenders of the company were: SBI, Axis Bank, South Indian Bank, ICICI Bank, HDFC Bank, WBIDFC along with others. After the conversion of a portion of debt these lenders would have 10-13% in the company while promoters holding has come down from 53% to 45%.


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