Shiva Cement Ltd was founded in 1986 and it commenced operations in 1986 in Orissa. It is engaged in the business of manufacture and sale of cement, clinker, and trading of allied products.
They are the makers of high strength “Mahabal” cement which consists of both Portland Slag Cement (PSC) and Portland Pozzolana Cement (PPC).
Management
Read the company’s Corporate Governance Report here.
Their Goals
Acquisition By JSW Cement
In 2017, JSW Cement; a part of JSW Group acquired 37% stake in the company from the promoters of Shiva Cement for 97 crores and another 32% stake through open offer at 14 Rs. per share for a total of 87 crores.
Current Capacity
Currently, Shiva Cement owns and operates only 1 cement plant in Sundargarh, Odisha with a cement production capacity of 1,32,000 MT and clinker production capacity of 1,15,500 MT.
Their Advantages
Capex
Owing to ample stock of captive Limestone at Khatkur Bahal Mines, they planned to increase production to 4000 TPD Clinker in 20 acres and expand their territory in the states of Odisha, West Bengal, Jharkhand & Bihar. Investment – 1500 crore and expanding to 1.3 MT. Expected to be commissioned in June 2022.
Financials
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
Sales
25.26
29.38
32.39
28.49
3.47
Sales Growth
15%
16%
10%
-12%
-88%
Raw Material Cost
7.38
7.2
9.67
8.35
9.83
Change in Inventory
1.28
-4.58
0.87
-0.15
7.16
Power and Fuel
12
11.99
16.73
15.96
3.2
Other Mfr. Exp
3.75
2.64
2.92
4.43
Employee Cost
3.81
3.99
4.22
4.06
2.77
Selling and admin
7.28
5.87
5.91
4.9
1.66
Other Expenses
0.62
0.03
0.72
0.04
17.64
Other Income
-9.86
0.35
-1.32
2.7
5.8
Depreciation
7.94
7.63
7.87
7.82
7.06
Interest
13.79
14.85
14.54
14.96
8.79
Profit before tax
-39.89
-29.05
-30.64
-29.48
-34.52
Tax Rate
22%
27%
25%
25%
26%
Tax
-8.8
-7.8
-7.81
-7.51
-9
Net profit
-31.09
-21.26
-22.82
-21.97
-25.52
EPS
-1.59
-1.09
-1.17
-1.13
-1.31
Reason For Extremely Low Revenue & Profit:
The new plant is being set up at the same location as the old one, thus currently no significant operations are taking place, so it is not making a Profit and has extremely low Sales.
Hi valorem
I had also gone through the Latest annual report.
My Doubt is even though company has been embarking on huge capex there
Property, plant and equipment actually decreases to 98 cr from 117 cr
Secondly CWIP is still 460 cr which means plenty of capex still left to be executed.
Thirdly Under Other current Assets there is Indirect tax balances/recoverable/credit which becomes 78 cr from 7 cr. can’t understand what it means
Please share your view on the same.
Disc: Invested. this is Not a buy or sell recommendation
The company has filled DLOF on 23.10.2023 for right issues of Rs 400 Cr out of which Rs 345 Cr to be utilized for repayment of existing Loans.
On 01.12.2023: As per SEBI site under Document in relation to which in
principal approval from Exchanges are awaited, the company name is appeared. SEBI | Processing Status : Issues
Shouvik holds a Bachelor’s degree in Civil Engineering from Bangalore University and has completed his Master’s in Business Administration. Shouvik has more than twenty-three years of rich experience in the field of sales, technical services and marketing. In the past he has been associated with Star Cement Limited where he was heading sales and marketing function for East and North East, Adhunik Cement Limited, Cement Manufacturing Company Limited, Ultratech Cement Limited and Ambuja Cement. (41) Shouvik Chakraborty | LinkedIn
22.12.2023 : SEBI | Processing Status : Issues
Draft Offer Document in relation to which clarifications are sought by SEBI and response from Lead Manager is awaited.
The parent company JSW Cement is also planning to raise fund through IPO route. JSW Group initiates plans to list cement unit (msn.com)
In 2021, JSW Cement had raised about Rs 1,500 crore from Apollo Global Management and Synergy Metals Investments Holding.The firm was looking to launch the IPO in 2024 by diluting 10-15% stake, of which 50% will be an offer for sale by the two PE investors!!!
So the Parent Company goes to IPO and same time for Right Issue on subsidiary company!!! Interesting to watch
SEBI | Processing Status : Issues
Draft Offer Document in relation to which Observations issued during the week : Observation issued on February 2,2024!!!
