NIFT UG 2015 Question Paper with solutions

  UltraTech Cement has signed a memorandum of understanding (MoU) to buy two cement plants of Jaiprakash Associates in Madhya Pradesh, a deal that will help consolidate its position as India’s biggest cement-maker. For Delhi-based Jaypee Group, the deal is part of an ongoing exercise to reduce debt, which stood at ₹ 65,000 crore as on March 31, 2014, and would shrink to close to ₹ 44,000, crore if this deal is consummated. The Aditya Birla Group firm will sign a definitive agreement after completing a due diligence process that will start shortly. A late evening press release from the company put the total enterprise valuation of the transaction, including debt, at ₹ 5,400 crore. The company’s board approved the acquisition recently. “The deal will help us scale up our presence in eastern and central UP and eastern and central MP. We have a marginal presence in these markets which is roughly growing at 8-9%,” said MD, UltraTech Cement. The acquisition will help the company ramp up capacity by 5 million tonnes to 68 million tonnes. Further, surplus clinker capacity (clinker is a key input for cement) at the two units will enable UltraTech to boost capacity by 2 million tonnes, said the press release. The plants are located at Satna in Madhya Pradesh. In the near term, it will have a financial impact as UltraTech have to pay higher interest on the debt accrued through the deal, said analyst at Brokerage Elara Capital. “But if you take a view of FY18 or later, the deal will be highly accretive as the region is expected to see minimal capacity addition.” “Utilisation levels of cement plants in FY18 are expected to rise to 90% from the present 85%, growing up more profits,” said Elara Capital’s. The acquisition, if concluded, would mean that the company’s plans to boost capacity to 71 million tonnes by 2016 will be achieved ahead of schedule. UltraTech had acquired the Gujarat units of Jaiprakash Associates, with a total capacity of 4.8 million tonnes, last year. It has earmarked ₹ 7,000 crore to expand capacities over the next three years