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Saturday, April 28, 2007

Binani Cement fixes IPO price band at 75-85; opens on May 7

Binani Cement, a subsidiary of Binani Industries (BIL), promoted by Braj Binani is entering the capital markets with a public offer of 20,500,000 equity shares of Rs 10 each for cash, through an offer for sale by JP Morgan Special Situations.

The offer shall be through the 100% book – building process. The price band for the offer has been fixed between Rs 75 and Rs 85 per equity share. The public offer opens on May 7, 2007, and closes for subscription on May 10, 2007. The offer shall constitute 10.09% of the post-offer paid-up capital of the company.

The equity shares are proposed to be listed on the National Stock Exchange and the Bombay Stock Exchange.

At least 60% of the offer will be allocated on a proportionate basis to qualified institutional buyers (QIBs). Also, 5% of the QIB portion shall be available for allocation on a proportionate basis to mutual funds only, and the remainder of the QIB portion shall be available for allocation on a proportionate basis to all QIB Bidders, including mutual funds, subject to valid bids being received at or above the offer price.

Upto 30% of the offer shall be available for allocation on a proportionate basis to the retail individual bidders and upto 10% of the offer shall be available for allocation on a proportionate basis to non-institutional bidders, subject to valid bids being received at or above the offer price.

It is focused on key markets in northern India with a significant presence in Rajasthan, Haryana and Delhi besides Gujarat in Western India. It has facilities for manufacture of 2.25 MTPA of cement which has now been enhanced to 5.3 MTPA at Sirohi, Rajasthan. It manufactures OPC and PPC, with an OPC: PPC product mix of about 71:29 in fiscal 2005, 63:37 during fiscal 2006 and 51:49 for fiscal 2007. The Sirohi facility has been set up with the support of the Denmark-based F. L. Smidth.

The company has increased the clinker capacity at its plant by 2.3 MTPA, with commercial production of the cement capacity expected to commence from May 2007. It is adding another 44.6 MW (2 X 22.3 MW) captive power plant to the existing 25 MW coal / lignite based plant with one unit of 22.3 MW expected to be commissioned by June 2007 and another by October 2007. The total cost of the expansion project is estimated at Rs. 5,750 million (including the second unit of the captive power plant to be installed by October 2007 at a cost of Rs. 600 million).

The company posted a total income of Rs 5,665 million and a profit before tax of Rs 1097 million for the nine months ended December 31, 2006. It posted a total income of Rs 5,840 million and a profit before tax of Rs 581 million for the year ended March 31, 2006.

The book running lead manager to the issue is ICICI Securities Primary Dealership and the co-book running lead manager is J P Morgan India Private Limited.

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