Private equity investor Actis is set to pick up 11 per cent stake in Dalmia Cements Bharat for $25 million (about Rs 112 crore).
A source close to the development said the UK-based investor would invest in the Tamil Nadu-based company through subscription of fresh equity shares. The deal would be announced shortly.
The source added the move followed Dalmia Cements' plan to raise Rs 700 crore (Rs 7 billion) through issue of securities. The proceeds would be utilised to part-finance the company's plans to increase capacities of its cement and sugar businesses.
It would seek shareholders' permission at an extraordinary meeting to be held soon, the company had informed the Bombay Stock Exchange.
Among the various options to raise the money, the company is looking at preferential allotment of shares, foreign currency convertible bonds, global and American depository shares and non-convertible debentures.
The company is looking to expanding its capacity to 10 million tonne per annum. At present, it has a 3.5-million-tonne cement capacity in Tamil Nadu and another 2.5 million tonne through a group company in Orissa.
The company is also expanding its sugar crushing capacity in Uttar Pradesh by 15,000 tonne a day. This will take its crushing capacity to 22,500 tonne, with a sugar production capacity of 200,000 tonne.
Actis has about $700 million investment under its management in South Asia and has been active in the Indian and Pakistan markets for 15 years. The Dalmia-investment will the fourth largest for the investor company.
Actis has invested $60 million in Punjab Tractors, $59 million in Housing Development Finance Corporation and $33 million in UTI Bank.
The company has also considerable investment in the IT and media companies such as Daksh, Sify and Alumnus Software and in Jyothi Laboratories.
As on December 31, 2005, the promoters hold nearly 45 per cent stake in Dalmia Cements.
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