Sucheta Dalal :Jaypee tries to cement its position again
Sucheta Dalal

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Jaypee tries to cement its position again  

April 23, 2010

The Jaypee group plans to ramp up its cement capacity up to 55 million tonnes (MT) by 2015, with an investment of around Rs8,000 crore-Rs10,000 crore. In addition, it also plans to expand its power capacity by 13,000MW over the next six years.

The group plans to increase its cement capacity from the current 22MT to 35MT by 2011. Going forward, it plans to further increase capacity to 55MT by 2015. The Jaypee group has interests in cement, power, engineering, hospitality and townships.

On being questioned on the total investment likely for this planned expansion in cement, Rahul Kumar, chief financial officer, Jaiprakash Associates Ltd, said, “To add 20MT of cement capacity, we would require an investment of close to Rs8,000 crore to Rs10,000 crore.”

The additional cement capacity which is being planned to take the total capacity to 35MT is already under construction. The remaining plants for the further planned expansion of 20MT are in the planning stage.

In the power segment, the company plans a total capacity of 13,000MW in the next six years. Out of this 13,000MW, 7,000MW has been planned in the thermal power segment, which is likely to be commissioned in the next four years. Work on the total 7,000MW capacity has already started.

Jaiprakash Gaur, founder-chairman of the group, expects the entity to grow at around 40% to 50% in the next 10 years. “To match a 9% gross domestic product growth, a few companies will have to grow at 40% to 50%. In the next 10 years, this group is poised to grow at 40% to 50%,” he said.

The group has announced the public listing for its infrastructure arm Jaypee Infratech Limited. Jaypee Infratech has set a price band of Rs102 to Rs117 per share for its initial public offer, aiming to raise up to Rs2,350 crore. The offer comprises fresh issue of shares to raise Rs16.5 million, as well as sale of 60 million shares by cement and construction firm Jaiprakash Associates.

Out of the total Rs2,350 crore, Rs1,650 crore will be utilised by Jaypee Infratech for project development and other corporate services. The remaining Rs700 crore would be utilised by the parent company, Jaiprakash Associates Ltd for expansion in various sectors.

Jaiprakash Infratech—which is developing the Yamuna Expressway—plans to open the route to traffic by 2011, before the commissioning date of 2013.— Amritha Pillay

-- Sucheta Dalal