The share price of UltraTech Cement surged over 4 percent to hit a 52-week high on Friday after the company announced an investment of Rs 5,477 crore towards 12.8 million tonnes per annum (MTPA) capacity expansion. At 9:34 am, the shares traded 4.26 percent higher at Rs 5,102 per share on the NSE.
The board of Ultratech Cement has approved increasing capacity by 12.8 million tonnes per annum (MTPA) with a mix of brownfield and greenfield expansion. The additional capacity will be created in the fast-growing markets of the East, Central and North regions of the country.
This expansion includes the existing approval for the cement plant at Pali in Rajasthan, in addition to its 6.7 MTPA capacity expansion currently underway in Uttar Pradesh, Odisha, Bihar and West Bengal, which has picked up pace and is expected to get commissioned by FY22, in a phased manner.
The company's press release said, "The commercial production from the new capacities is expected to go on stream in a phased manner, by Q4FY23. This capacity addition will not impact the ongoing deleveraging program which is on track to make Ultratech Cement debt-free by the time the expansion program is completed. Upon completion of the latest round of expansion, the company's capacity will grow to 136.25 MTPA, reinforcing its position as the third largest cement company in the world, outside of China.."
Commenting on the investment, Kumar Mangalam Birla, Chairman, said, "This significant investment in a core infrastructure sector will accelerate the wheels of economic activity and aid the kickstart of the private investment cycle. The capital outlay, given the current economic backdrop, is aligned with the government's Atmanirbhar Bharat program."
The company’s consolidated debt stood at Rs 12,132 crore for the quarter ended September 2020. Its net debt fell by nearly Rs 2,500 crore over the preceding three months during the period.