Reliance Infrastructure has decided to monetise its cement business to fund the acquisition of Pipavav Defence and Offshore Engineering, which it is acquiring for Rs 2,082 crore.
Reliance Cement, a fully-owned subsidiary of Reliance Infra, is in talks with two international cement companies, Heidelberg and Italcementi, and has offered a 50 per cent stake in the company. The prospective joint venture partner will also fund the company?s cement capacity expansion – estimated to rise from five million tonne per annum (mtpa) to 15 mtpa by 2018. Reliance Cement has a five mtpa plant in Maihar (Madhya Pradesh). As part of its expansion plan, it is setting up another five-mtpa plant in Maharashtra, which is set to be operational by 2017.
The company is also planning another plant with a capacity of five mtpa, to be operational by 2018. For that, the company is considering two options – a second line in Madhya Pradesh or Karnataka for the southern market or a plant in Rajasthan to cater to the market in the North.