BS reported that Dalmia Cement (Bharat) Ltd, second largest producer from the southern region, is evaluating options to buy out cement companies.

DCBL had charted plans to launch a 10 million tonne per annum capacity in 2008 through its wholly owned subsidiary, Dalmia Cement Ventures Ltd, which never took off.

It was looking at setting up plants in Himachal Pradesh, Meghalaya, Rajasthan and Madhya Pradesh, with investment of about INR 4,200 crore. It did not set proceed with these and is looking at a spread of new projects and mergers & acquisitions from the money it received through private equity infusion.

DCBL received INR 500 crore from PE giant Kohlberg Kravis & Roberts in May 2010 for a stake sale of 20% in its cement subsidiary, Avnija Properties. KKR has an option to top it by another INR 250 crore. It had assessed DCBL for an enterprise value per tonne of USD 104.

Mr Puneet Dalmia MD of DCBL said “After the KKR investment, we have made significant progress in land acquisitions, land clearances and acquiring limestone reserves. We want to deepen our footprint in south and east India. Since 2008, we saw the global economy melting down, a lot of new players entering the market and some players struggle, which gives space to lot of M&A opportunities. So, after the KKR opportunity, we are looking at a mix of Greenfield and potential M&A opportunity. We have put aside some capital for the same. Though we really cannot put a hard number on how much capital we are putting aside, KKR has a large balance sheet and we will be able to do acquisitions.”

(Sourced from BS)