HeidelbergCement India plans to raise Rs 370 crore through a private placement of unsecured non-convertible debenture to its non-resident parent and group companies.

A meeting of the cement maker’s board of directors will be held on December 16 to consider issuance and allotment of the debentures aggregating to Rs 370 crore, said the company in a statement.

India Ratings and Research has assigned an ‘Ind AA-’ with stable outlook rating to the unsecured debentures, reflecting strong legal, strategic and operational linkages between HeidelbergCement India and its parent.

The rating indicates a high degree of safety regarding timely servicing of financial obligations and very low credit risk.

On standalone basis, HeidelbergCement India’s credit profile reflects the negative impact of its Rs 1,600-crore debt-led capacity expansion in Damoh and Jhansi.

Its net leverage soared to a high of 12.4 times last year from 7.1.

The full impact of the capacity expansion will accrue from next year and will be reflected in the form of improved net leverage, said the agency.

However, the company’s average lead distance could see an increase as it taps new markets to use its expanded capacity.

Besides, given the additional capacities coming up in central India and the general slowdown in consuming sectors, the company could remain exposed to a weak pricing environment, which could potentially delay some of the improvements envisaged in its standalone credit profile, said the credit rating agency.

HeidelbergCement has four manufacturing facilities. It has 5 million tonnes cumulative capacity in Madhya Pradesh and Uttar Pradesh, 0.6 mt in Maharashtra and 0.4 mt in Karnataka. Post sale of the Raigad facility, 93 per cent of the company’s capacity would be located in Central India.

Shares of the company closed 1.08 per cent higher at Rs 37.40 on Thursday on the BSE.

> suresh.i@thehindu.co.in

Related Topics