Andhra Cement, a key player in India’s cement industry, has received approval from the Securities and Exchange Board of India (SEBI) for its rights issue, aimed at raising INR 180 crore. The green light from SEBI follows the company’s submission of its draft papers on 30 September 2024, just one day after the Rights Issue Committee meeting. This marks a crucial step forward in the company’s plans to strengthen its financial position and expand its operations.
The rights issue, which allows existing shareholders to purchase additional shares, comes as part of a broader strategy that was first approved by the Andhra Cement board in March 2024. Alongside this rights issue, the company also intends to raise INR 250 crore through debt, signaling its ambition to reinvigorate operations and fuel growth. Investors responded positively to the news, with Andhra Cement’s shares hitting a 10% upper circuit on the National Stock Exchange (NSE), closing at INR 94.80. Under the Sagar Group’s banner, Andhra Cement operates two key production facilities in Andhra Pradesh, manufacturing both Ordinary Portland Cement (OPC) and Pozzolana Portland Cement (PPC). Despite facing a challenging financial landscape, including a net loss of INR 35 crore in the first half of FY 2025—worsening from INR 1 crore in the previous year—the company’s move to raise capital indicates its commitment to overcoming its financial hurdles.
The proceeds from the rights issue are expected to support several strategic initiatives, including debt reduction, ramping up production capabilities, and reinforcing the company’s growth plans in an industry where demand is highly cyclical. By strengthening its financial foundation, Andhra Cement aims to navigate the competitive cement market and capitalize on future opportunities. With SEBI’s approval now in place, Andhra Cement must now secure further regulatory approvals from the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to list the newly issued shares. The company is committed to adhering to the legal guidelines set forth by SEBI and the Companies Act, ensuring full transparency and compliance. This INR 180 crore rights issue approval represents a significant milestone for Andhra Cement as it works to solidify its market position and turn around its fortunes. The market’s positive response reflects confidence in the company’s potential and strategic direction, making this a pivotal moment in Andhra Cement’s ongoing journey in the cement sector.
