Jaiprakash Associates to raise fund for capex

New Delhi: Jaiprakash Associates which has interests in cement, construction, hospitality and real estate, proposes to raise about Rs 1,800 crore through a rights issue to fund its capital expenditure programme.

In a communication to the stock exchanges, the company has said the promoters have given a firm commitment to subscribe to the unsubscribed portion of the rights issue. The company has formed a committee of directors to decide on the timing, size and pricing of the issue.

The company has about 7.5 million tonnes of cement capacity and has said it will increase this to about 20 mt by 2010. It has also announced a Rs 1,600-crore investment in the steel sector to make long products.

For the second quarter of this financial year, Jaiprakash Associates has reported a net profit of Rs 203.13 crore on income from operations of Rs 1,182.60 crore against a net profit of Rs 103.62 crore on an income of Rs 862.46 crore for the same period last year. The company had an other income component of Rs 104 crore (Rs 60 crore), which includes advances bagged for new projects as well as dividends received from a group firm, a company executive said.

In the first half of the year, it has posted a net profit of Rs 330.39 crore on an income of Rs 2,331.31 crore, compared to a net profit of Rs 243.46 crore on an income of Rs 1,804.92 crore last year. The board of directors has declared an interim dividend of 30 paise a share, or 15 per cent.