VCCircle

As infrastructure building gathers momentum in India, Infrastructure Development and Finance Corporation (IDFC) has decided to invest Rs 25 crore for a 6.55 per cent stake in Andhra Cements, reports The Economic Times. This will help part-fund the GP Goenka group company’s Rs 400-crore expansion plans. Besides equity, IDFC and HDFC have also extended a Rs 275-crore debt to Andhra Cements.

Cement prices are ruling high so much so that the government recently reduced import duties on portland cement. Even though cement is a cyclical commodity business, the prices are likely to remain firm for sometime as infrastructure and housing continue to attract investment.

Andhra Cements, like many cement companies, is expanding its capacity by another 3 million tonne to take its total capacity to 4 million tonne. This is expected to go on stream by early 2009.

Of the total project cost of Rs 400 crore, Rs 300 crore will come from funds and institutions, while Rs 100 crore from the promoters who hold 77 per cent in the company.