IFC may lend up to $100M to part-finance UltraTech’s capex in Chhattisgarh

IFC, the private sector investment arm of the World Bank Group, is planning to lend up to $100 million to Aditya Birla Group-controlled UltraTech Cement to part-finance the expansion of its cement plant located near Rawan village in Tehsil Sigma, Chhattisgarh. The total cost of the project is estimated at $297 million.

The project involves expansion of UltraTech’s clinker production capacity, a key component of the company’s cement capacity expansion strategy in the eastern part of India.

Grasim Industries Ltd of the Aditya Birla Group owns 60.3 per cent stake in UltraTech, the largest cement manufacturer in India that has 22 cement plants in the country and more than 100 ready-mix concrete plants spanning India, the UAE, Bahrain, Bangladesh and Sri Lanka, with an installed capacity of 52 million tonnes per annum.

UltraTech was spliced out of Grasim a few years ago and also houses the acquired cement business from Larsen & Toubro.

The company is part of the diversified Aditya Birla Group, which operates in 33 countries with more than 133,000 employees globally. The group has business interests in viscose staple fibre, metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilisers, insulators, financial services, telecom, BPO and IT services.

IFC has been active in equity, quasi-equity and debt finance deals in India across sectors and last October, committed $40 million in debt finance to Odisha-based cement producer OCL India Ltd to part-fund a greenfield plant in West Bengal.

OCL is setting up a 1.35 MTPA (million tonnes per annum) greenfield cement grinding unit in Midnapur, West Bengal. The investment cost of the project is estimated at $102 million and IFC is looking to come in with a loan of $40 million. The balance funding requirement will be met through rupee debt and internal accruals.

OCL is a part of the Dalmia Group, with Dalmia Cement (Bharat) Ltd owning 45 per cent stake in the public-listed firm. The Dalmia group collectively holds 70 per cent stake in OCL, with the remaining 30 per cent held by general public and institutional investors. Dalmia Cement (Bharat) is also backed by private equity giant KKR.

(Edited by Sanghamitra Mandal)

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