OPIL to raise Rs 175-cr through rights issue
The company is yet to decide on the merchant banker, ratio of the rights issue and its pricing.
By TNN |
NEW DELHI: Orient Paper & Industries Ltd (OPIL), which is part of the Chandrakant Birla group, on Thursday decided to raise upto Rs 175 crore of fresh resources from the market through a rights issue to finance future projects. The management has informed the Bombay Stock Exchange about this.
For starters, OPIL obtained in-principal approval from its board of directors for the enabling resolution at a meeting held in Delhi. Following this, it proposes to seek shareholders’ approval.
When contacted, OPIL managing director M.L. Pachisia told ET: “The rights issue proceeds will meet bulk of its Rs 250 crore commitment for projects and repayment of high cost debt which is upwards of Rs 400 crore.” Internal generations will also be used to finance the projects, he added.
The company is yet to decide on the merchant banker, ratio of the rights issue and its pricing.
At present, OPIL’s lead promoters, the Birlas, hold close to 30.78 %. The OPIL scrip was quoting at Rs 612 on the BSE on Thursday.
ADVERTISEMENT
Orient Paper & Industries has firmed up plans to expand its cement and paper business. The expansion programme includes enhancement of cement capacity by 41.6 % to 3.4 million tonne per annum, setting up of a captive power plant and a new tissue paper manufacturing plant at Amlai, Madhya Pradesh. It also proposes to enhance its fan manufacturing capacity by 35.6% to 35 lakh fans per annum.Total outlay for these proposed projects is estimated at Rs 250 crore. While installation of the captive power plant will entail an investment of Rs 110 crore, expansion of the cement capacity and the new tissue paper plant will require an investment of Rs 66.5 crore and Rs 52.5 crore respectively. Augmentation of the fan manufacturing capacity will entail an investment of roughly Rs 20 crore.
Elaborating, Mr Pachisia said: “The focus is now on expanding our cement and paper businesses. Installation of a 30 mw captive thermal power plant at the Devapur cement manufacturing unit will lead to savings of Rs 35-40 crore annually.”
Apart from the 1.6 million tonnes per annum (mtpa) cement unit in Devapur (Andhra Pradesh), the company also has a 0.8 mtpa grinding unit at Jalgaon in Maharashtra. It proposes to increase the total cement capacity to 3.4 mtpa through de-bottlenecking and installation of supplementary equipment’s at the cement units.
ADVERTISEMENT
The company plans to set up a new 20,000 metric tonnes per annum of tissue paper manufacturing plant at Amlai. The move will enhance its tissue paper capacity to 32,000 metric tonnes per annum and its total paper and printing capacity to 1,00,000 metric tonnes per annum. Expansion of the fan manufacturing units at Faridabad and Kolkata will help the company produce some 35 lakh fans per annum from 25.8 lakh fans per annum now.Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
