Binani Cement eyes foreign presence via stake sale, says MD

News of Binani Cement divesting about 40 percent of its stake to a subsidiary in Singapore drove the share prices up to a 52 week high on Wednesday. Vinod Juneja, MD of Braj Binani Group told CNBC-TV18, the company is interested in becoming an international player and the stake sale would be in line with that objective. He also added that the sentiment about the cement industry has improved of late and therefore, they are planning expansions in places like China and Dubai.

Here is the edited transcript of the interview on CNBC-TV18. Q: There have been rumours that apparently you are looking to divest about 40 percent stake in Binani Cement. First, would you want to confirm that and how far are negotiations already?
A: There is no negotiation. I only want to mention that till recently, Binani Cement was having 25 percent equity of JP Morgan and 10 percent of Credit Suisse. So, there is nothing new and 35 percent of the equity of Binani Cement till 2008-2009 was between JP Morgan and Credit Suisse. Binani Cement as a cement company is not only limited to India. We have got plants in India where we have got a capacity of 6.5 million tonne in two different locations in India but, now we have also become a global player.
Binani Cement has got a plant, it is the only Indian company which has got a 3 million tonne cement plant running in China. A 3 million tonne plant is also running in Dubai. We have now become a global player. Last year, we have done share buybacks whereby, we have purchased whatever shares were there in the market for a good price.
We are holding almost 99.6 percent equity in Binani. We have got equity base of Rs 180 crore and we think it is a fairly good equity for Binani. We always thought it is for us and if we have to disinvest, as we have said, our board has decided on it recently. But, we have not made any concrete plan. We know how to do it but, definitely we wanted to become an international player.
Binani Industries which is a holding company is still listed. Binani Cement which till last year was listed both in BSE and NSE and at that time, listing for Binani Cement was 10 percent done by JP Morgan. Now the right time has come. We thought we will do something. There is no point because we have to go for expansion, we have to go for overseas acquisition and Binani has to look out for opportunities. We require these and we want to be liquid.
There is no point in keeping 100 percent equity with you. We said this is the right time so let us see how it shapes up because so far there is a good sentiment for the cement industry in India.
There is a good outlook from every known credit analyst and everybody holds a positive outlook on the cement and pharma industry. This particular year, 2013-2014, when it is an election year infrastructure will be more in demand whether it is for roads or bridges and things will improve. Q: We understand that it is a good year for the cement industry. One clarification we wanted was whether you have got a specific capacity increased target in mind for which you need some cash which might induce some kind of offering or equity offering to global investors. Is that on the cards, do you have a specific capacity expansion in mind?
A: Yes. We want to expand in China. So far we have got a clinkerisation plant, we are trying to put up another in China. We are trying to put up another grinding unit to increase our capacity. In Dubai also we are trying to do the same. These are some of the things in line and we are trying to work it out.