Kesoram Industries, owned by Manjushree Khaitan, daughter of the late Basant Kumar Birla, raised three-year deposits by offering a coupon rate of 12.25% per annum. The company has a total cement production capacity of 10.8 million tonnes per annum and plans to use the proceeds for its working capital needs.

The company is raising high-cost term deposits as it recently raised Rs 400 crore as a rights issue to repay Rs 55 crore of non-convertible debentures (NCD) and advance optional convertible bonds worth Rs 294 crore. Term deposit rates are much higher than those offered by other companies in the market today.

According to media reports, Manipal Housing Finance Syndicate offers a maximum coupon rate of 7.75% per annum for three-year term deposits. Shriram Transport Finance Co offers a maximum coupon rate of 7.48% per annum.

Analysts said Kesoram posted a loss of Rs 130 crore on revenue of Rs 3,540 crore in the fiscal year ended March 2022 and is taking several steps to reduce debt.

“KIL is at risk of refinancing, with 78% of debt amortised in February 2026 and a high redemption premium. Furthermore, the lack of approved working capital constraints could hinder the ability to fund increased working capital needs if necessary. Nonetheless, it plans to refinance its existing high-cost debt on favourable terms in the near term, which could support future debt coverage metrics,” analysts at rating firm ICRA said in June.

In fiscal 2022, the rating firm said that the strong growth in transaction volumes was mainly due to improved liquidity following one-off settlements with lenders.

For the remainder of the fiscal year, analysts expect the company’s sales to rise about 6-8% yearly as demand from the infrastructure and housing sectors picks up.

Shares of Kesoram closed down 3% at Rs 46.5 per share on Monday, giving it a total market cap of Rs 1,134 crore. Kesoram owns two integrated cement manufacturing plants in Sedam and Basantnagar Telangana in Karnataka. The total clinker capacity is 6.3 MTPA, and the cement unit is 10.8 MTPA.