Penna Cement Industries Limited one of the largest privately held cement companies in India in terms of cement production capacity. Penna Cement Industries IPO comprises public Issue of [●] Equity Shares of Rs.10/- each at a price of Rs. [●]/- per Equity Share aggregating to Rs. 4500.00 Millions.
Let’s have a detailed review of the company and analytics of the Penna Cement Industries IPO release date, IPO offer price, subscription, Penna Cement Industries IPO allotment, grey market price and other details like the company’s background, its financial positions, its promoters and other related things.
Penna Cement Industries IPO Review & Ratings
| IPO Ratings & Review | |
| Criteria | Ratings |
| Industry Sentiments | 8.5/10 |
| Industry Ranking | 7.8/10 |
| Company Background | 7.9/10 |
| Company Reputation | 7.9/10 |
| Competitive Edge | 7.7/10 |
| Financial Statements | 7.8/10 |
| Popularity Index | 8.4/10 |
| Promoters Reputation | 7.7/10 |
| Retail Appetite | 7.9/10 |
| Top Brokers Review | 7.9/10 |
| Overall Ratings | 8.1/10 |
| Star Ratings | ★★★★☆ |
Summary of Penna Cement Industries IPO
Penna Cement Industries Limited one of the largest privately held cement companies in India in terms of cement production capacity. Initial public offer of up to [●] Equity Shares of Rs. 10 each, at an Offer Price of Rs. [●] per Equity Share for cash aggregating up to Rs. 15,500 million. The Offer comprises of a Fresh Issue of up to [●] Equity Shares aggregating to Rs. 13,000 million and an Offer for Sale of up to [●] Equity Shares aggregating to Rs. 2,500 million by the Selling Shareholder.
From FY 2013-14 to FY 2016-2017, as per the Restated Financial Statements,
- The EBITDA and restated profit for the period/year have grown at a CAGR of 22.20% and 47.34%, respectively, from Fiscal 2014 to Fiscal 2018 and were Rs. 674.87 million and Rs. 120.97 million, respectively, in the three months ended June 30, 2018.
- The net asset value per Equity Share was Rs. 70.64 and Rs. 69.80 as of June 30, 2018 and March 31, 2018, respectively, as per the Restated Standalone Financial Statements and Rs. 77.14 and Rs. 76.19 as of June 30, 2018 and March 31, 2018, respectively, as per the Restated Consolidated Financial Statements.
- The net worth, including non-controlling interests, as of June 30, 2018 and March 31, 2018 was Rs. 9,451.02 million, and Rs. 9,339.00 million, respectively, as per the Restated Standalone Financial Statements and Rs. 10,320.73 million Rs. 10,194.08 million, respectively, as per the Restated Consolidated Financial Statements.
- The cement sales have grown at a CAGR of 3.08% from 3.75 million MT in Fiscal 2014 to 4.24 million MT in Fiscal 2018 and was 1.14 million MT in the three months ended June 30, 2018.
The Promoters of this company are P. Prathap Reddy, Pioneer Builders and P R Cement Holdings Limited. The lead manager to the issue are Edelweiss Financial Services Limited, IIFL Holdings Limited, JM Financial Limited, YES Securities (India) Limited and the Registrar to this issue is Karvy Computershare Private Limited.
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Penna Cement Industries IPO Date
The opening and the closing date of Penna Cement Industries IPO is not known yet.
Penna Cement Industries IPO Subscription
| Day / Date | QIB | NII | RII | Total Subscription |
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| Shares Offered or Net Issue |
The shares subscribed by the public will be updated herein on a daily basis, once the IPO is open for subscription.
Penna Cement Industries IPO Allotment Status
Here, you can find the Allotment Status of this IPO.
Penna Cement Industries IPO Price Band
The face value of each share is Rs 10, but the price band of the IPO is not yet disclosed.
Penna Cement Industries IPO Equity Share Offering
Initial public offer of up to [●] Equity Shares of Rs. 10 each, at an Offer Price of Rs. [●] per Equity Share for cash aggregating up to Rs. 15,500 million.
Penna Cement Industries Limited – Company Overview
Penna Cement Industries Limited was originally incorporated as Penna Cement Industries Private Limited in 1991 under the provisions of Companies Act, 1956. Penna Cement Industries Limited one of the largest privately held cement companies in India in terms of cement production capacity.
They have four integrated manufacturing facilities and two grinding units spread across the states of Andhra Pradesh, Telangana and Maharashtra, with an aggregate cement production capacity of 10.00 million tonne per annum (“MMTPA”) as of June 30, 2018, and they are in the process of increasing such capacity to 16.50 MMTPA which is expected to be operational by Fiscal 2021.
They are also in the process of increasing their aggregate clinker production capacity from 5.30 MMTPA as of June 30, 2018 to 10.80 MMTPA, which is expected to be operational by Fiscal 2021. Their integrated manufacturing facilities and grinding units are strategically located, with road, railway and sea route access to a number of markets, including Hyderabad, Amravati, Bengaluru, Chennai, Pune, Mumbai and Cochin.
Their facilities located at Boyareddypalli, Ganeshpahad, Tandur and Patas have dedicated railway sidings which enable transportation of clinker, cement and coal. They have also received an in-principle approval for setting up a dedicated railway siding at their Krishnapatnam unit.
The Company is promoted by P. Prathap Reddy, Pioneer Builders and P R Cement Holdiings Limited and are the guiding force behind the growth and strategic decisions of the Company.
Competitive Strengths of Penna Cement Industries Limited:
- One of the market leaders in south India with a strong brand recall and extensive distribution network;
- Strategically located integrated manufacturing facilities which provide access to south, west and east India markets;
- Access to quality raw materials and coal;
- Well positioned to benefit from the growth in the cement industry;
- Established track record of operational and financial performance;
- Experienced promoter and management team with an established track record of project and timely execution
Business strategies of Penna Cement Industries Limited:
- Focus on port based logistics infrastructure and distribution, consolidate presence in south India and expanding presence in east and west India, and commence exports
- Setting up new facilities to establish presence in north India
- Increase sales of blended cement to increase volumes and profit margins
- Improve operational efficiency and continue to implement measures to reduce costs
- Further strengthen the sales and distribution capabilities and focus on growing the ‘Penna’ brand
Penna Cement Industries Limited – Financial Statements
A quick look into the past financial performance of the company to understand its performance of business and evaluate the growth prospectus:
Financial Summary:
On the basis of Standalone statement:-
| Amount (in INR & millions) | |||||
| 31-Jun-18 | 31-Mar-18 | 31-Mar-17 | 31-Mar-16 | 31-Mar-15 | |
| Total Assets | 32,232.26 | 28,798.87 | 24,033.10 | 21,141.24 | 29,862.95 |
| Total Revenue | 4,565.83 | 18,596.13 | 18,878.19 | 19,566.16 | 18,875.23 |
| Total Expense | 4,419.17 | 16,292.34 | 16,469.58 | 15,683.99 | 16,661.40 |
| Profit After Tax | 106.11 | 1,652.90 | 1,744.61 | 2,672.83 | 1,473.29 |
Earnings per Equity Share (in Millions)
| 31-Jun-18 | 31-Mar-18 | 31-Mar-17 | 31-Mar-16 | 31-Mar-15 | |
| Basic & Diluted | 0.79 | 12.35 | 13.04 | 19.98 | 11.01 |
From the above statements, one could find that the Penna Cement Industries Limited may perform well.
Penna Cement Industries IPO – Promoters
The Promoters of this company are:
- P. Prathap Reddy, Pioneer Builders
- P R Cement Holdings Limited
List of Related Parties (Key Managerial Personnel)
- Bezawada Vikram
- Lakshmi Kantham Dabbara
- Krishna Srivastava
- Petluru Venugopal Reddy
- G.M. Krishna
- Sanjeev Kumar Aggarwal
- Raj Kumar Singh
Interest in promotion of the Company
Company is currently promoted by the Promoters in order to carry on its present business. Promoters are interested in the Company to the extent of their shareholding and directorship of the Individual Promoter in the Company and the dividend declared, if any, by the Company. The Promoters are interested in the transactions entered into the Company and the Promoter Group.
Property Interest
The promoters along with the promoter group will continue to hold collectively some percentage of the equity share capital of the company. As a result of the same, they will be able to exercise significant influence over the control of the outcome of the matter that requires approval of the majority shareholders vote.
Interest in Intellectual Rights of the Company
Promoters has not shown any interest in acquiring the intellectual rights of the company.
Penna Cement Industries IPO Offer Details or Issue Details
| Particulars | No. Of Equity Shares |
| Equity Shares Offered | Up to [●] Equity Shares aggregating up to Rs. 15,500 million |
| Of which: | |
| Fresh Issue | Up to [●] Equity Shares aggregating up to Rs. 13,000 million |
| Offer for sale | Up to [●] Equity Shares aggregating up to Rs. 2,500 million |
| Reserved for Market Makers | Upto [●] Equity Shares of face value of Rs. 10/- each |
| Net Issue to the Public | Upto [●] Equity Shares of face value of Rs.10/- each |
| Of which: | |
| QIB Portion | Not more than [●] Equity shares of face value of Rs. 10/- each fully paid of the Company for cash at a price of Rs. [●]/- per share aggregating Rs. [●] Millions; shall be available for allocation to QIB |
| Of which | |
| Available for allocation to Mutual Funds only (5% of the QIB portion) (Excluding the Anchor Investor Portion) | [●] Equity Shares of Face Value of Rs. 10/- each |
| Balance for all QIBs including Mutual Funds | [●] Equity Shares of Face Value of Rs. 10/- each |
| Retail Investors Portion | Upto [●] Equity Shares of face value of Rs. 10/- each (available for allotment to Retail Individual Investors of up to Rs. 2.00 Lacs) |
| Non-Retail Investors Portion | Upto [●] Equity Shares of face value of Rs. 10 /- each (available for allocation to investors up to Rs. 2.00 Lacs) |
| Equity Shares outstanding prior to the Issue | 133,800,000 Equity Shares |
| Equity Shares outstanding after the Issue | [●] Equity Shares |
Penna Cement Industries IPO Issue Object
These are the IPO Issue Objects of the company
- Funding the Working Capital requirements of the Company:
- Repayment/ pre-payment of certain unsecured loans availed from banks and financial institutions by the company; and
- General Corporate Purposes
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Penna Cement Industries IPO – Basis of the Offer Price
The issue price is determined by the company in consultation with the Lead manager on the basis of the following qualitative and quantitative factors.
Qualitative factors are:
- One of the market leaders in south India with a strong brand recall and extensive distribution network;
- Strategically located integrated manufacturing facilities which provide access to south, west and east India markets;
- Access to quality raw materials and coal;
- Well positioned to benefit from the growth in the cement industry;
- Established track record of operational and financial performance;
- Experienced promoter and management team with an established track record of project and timely execution
The relevant quantitative factors are:
| Basic & Diluted EPS | RONW (%) | NAV (Rs.) | |
| 31-Mar-16 | 19.98 | 43.80 | – |
| 31-Mar-17 | 13.04 | 22.46 | – |
| 31-Mar-18 | 12.35 | 17.70 |
69.80 |
- Price to Earnings (P/E) ratio in relation to Issue Price of [●] per Equity Share of face value of Rs. 10 each
| Particulars | P/E ratio |
| Highest | [●] |
| Average | [●] |
| Lowest | [●] |
- Competitive Peers:
| Sr. No. | Particulars | Face Value (in Rs.) | Basic EPS (In Rs.) | Diluted EPS (In Rs.) | P/E Ratio | RONW in % |
| 1 | Penna Cement Industries Limited | 10.00 | 11.71 | 11.71 | NA | 15.37 |
| 2 | UltraTech Cement Ltd | 10.00 | 80.94 | 80.92 | 41.26 | 8.4 |
| 3 | Shree Cement Ltd | 10.00 | 397.30 | 397.30 | 34.12 | 15.6 |
| 4 | Ambuja Cements Ltd* | 2.00 | 7.64 | 7.64 | 25.27 | 7.7 |
| 5 | ACC Ltd* | 10.00 | 49.23 | 49.10 | 27.85 | 9.9 |
| 6 | Dalmia Bharat Ltd | 2.00 | 60.30 | 60.30 | 34.91 | 9.6 |
| 7 | The Ramco Cements Limited | 1.00 | 25.00 | 25.00 | 22.72 | 13.8 |
| 8 | India Cements Ltd | 10.00 | 2.29 | 2.29 | 35.72 | 1.3 |
| 9 | Birla Corporation Ltd | 10.00 | 19.99 | 19.99 | 29.67 | 3.6 |
| 10 | J.K. Cement Ltd | 10.00 | 41.41 | 41.41 | 16.11 | 14.5 |
| 11 | JK Lakshmi Cement Ltd | 5.00 | 4.69 | 4.69 | 56.75 | 3.0 |
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Penna Cement Industries IPO Lead Managers
| Lead Managers |
| Edelweiss Financial Services Limited
IIFL Holdings Limited JM Financial Limited YES Securities (India) Limited |
Penna Cement Industries IPO Registrar to offer
| Registrar to the Offer |
| Karvy Computershare Private Limited Karvy Selenium, Tower – B Plot 31 and 32, Gachibowli Financial District, Nanakramguda Hyderabad 500 032 Telangana, India Tel: +91 40 6716 2222 Fax: +91 40 2343 1551 E-mail: [email protected] Investor grievance e-mail: [email protected] Website: www.karisma.karvy.com Contact Person: Murali Krishna M SEBI Registration No.: INR000000221 |
Other Details:
- Statutory Auditor – C. Ramachandram & Co., Chartered Accountants
- Peer Review Auditor – S.N. Shah and Associates, Chartered Accountants
- Bankers to the Company – HDFC Bank Limited
Penna Cement Industries IPO Review by Top 10 Stock Brokers
| Top Stock Brokers Review | Company Reputation | Competitive Edge | Financial Statement | Popularity Index | Promoters Reputation |
| Angel Broking | 7.5/10 | 7.4/10 | 8.5/10 | 8.1/10 | 7.1/10 |
| Sharekhan | 7.2/10 | 7.1/10 | 8.6/10 | 8.1/10 | 7.2/10 |
| Kotak Securities | 7.3/10 | 7.5/10 | 8.4/10 | 8.1/10 | 7.3/10 |
| ICICI Direct | 7.3/10 | 7.3/10 | 8.7/10 | 8.1/10 | 7.1/10 |
| IIFL | 7.5/10 | 7.2/10 | 8.8/10 | 8.0/10 | 7.1/10 |
| Edelweiss | 7.5/10 | 7.4/10 | 8.4/10 | 8.3/10 | 7.2/10 |
| Zerodha | 7.4/10 | 7.1/10 | 8.5/10 | 8.1/10 | 7.0/10 |
| 5Paisa | 7.1/10 | 7.1/10 | 8.4/10 | 8.1/10 | 7.1/10 |
| Karvy | 7.4/10 | 7.3/10 | 8.2/10 | 8.1/10 | 7.1/10 |
| Motilal Oswal | 7.1/10 | 7.1/10 | 8.6/10 | 8.3/10 | 7.2/10 |
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