Barak Valley Cements Limited:

Huge equity Capital Base:

Barak Valley Cements Limited was incorporated as a public limited company in the year 1999, under the Companies Act, 1956.The company was promoted by Mr. Prahlad Rai Chamaria, Mr. Bijay Kumar Garodia and Mr. Santosh Kumar Bajaj.

The promoters of the company are born and brought up in the North East Region. All the promoters of the company are well known and reputed businessmen in North East and are having a vast experience in different segments like plywood, Timber, Cement, and Concrete Sleepers etc.

Presently the Company is engaged in the business of manufacturing of cement of different grades and is marketing its product under the brand name “Valley Strong Cement”. The company started its commercial production in April 2001. The company started its commercial production at the capacity of the plant at 300 TPD initially. The capacity of the plant was further enhanced from 300 TPD to 460 TPD. The technology that is used in manufacturing its product is Dry Process Rotary Kiln Technology with 4 stage Suspension Pre Heater technology.

The company is located in Assam and all the operations of the company are concentrated in the North Eastern region. The manufacturing unit of the company is at Joom Basti, Devendranagar, Badarpurghat, District Karimganj, Assam. Its sales are also concentrated in the North Eastern region. Its operations include raw material procurement, crushing, blending, grinding and packaging of cement.

Its product portfolio includes both Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC). BVCL is ISO 9001: 2000 certified company and its products confirm to BIS (Bureau of Indian Standards) specifications.

Being located in Assam, we are entitled to get various benefits like Excise duty exemption, Central Sales tax/VAT exemption, Income-tax exemption, Working capital interest subsidy and Insurance subsidy.

Currently BVCL is enjoying several State and Central Government incentives. The Main incentives available to the company are:

a) 100% Central Excise duty exemption upto 31st March, 2018.

b) 100% Central Sales tax/ 99% VAT exemption upto 31st March, 2017.

c) 100% Income-tax exemption under section 80 IC, subject to Minimum Alternate Tax (MAT) U/s 115JB of Income Tax Act, 1961 up to 31st March, 2018.

d) Insurance subsidy, being 100% premium payable under Comprehensive Insurance Scheme, 1997 by the Government up to FY 2018.

e) 3% Working Capital Interest Subsidy payable by the Goverment upto FY 2018.

f) Capital Investment Subsidy of 30% investment in new Plant & Machinery up to 31st March, 2017.

These incentives ensure it's competitiveness with national players as well as helps it in pricing its product competitively with these players. Locational Advantage: Its manufacturing unit is located in Barak Valley region, Assam. This entire area is surrounded by the other states of North-East such as Mizoram, Tripura, and Southern part of Meghalaya, which are its markets. Barak Valley is the foot land of all the three states and Badarpur Ghat is the junction point. Location. Its manufacturing unit is well connected with national – highways and railway. Location of its manufacturing unit helps it in reaching its customers economically.The location also helps it in meeting the demand of dealers/subdealers/ distributors in shortest possible time.

Deficit Cement Market: North East is the deficit market and the demand of the cement is higher than the supply of cement. In the financial year 2005-06 the demand of cement was 3.15 million tons MT and supply was1.25 million tons This demand and supply gap is likely to increase in future.

Quality Raw Material and Fuel: Two critical materials for the cement production are Limestone as raw material and coal as fuel. Limestone deposits of good quality having CaO (calcium Oxide) of more than 47% are spread over a large area just 75 KM away from its plant site. Coal having Calorific value of 6000-7000 Kcal /Kg. and ash content as low as 8% is available in plenty in Bapung and Surupi, areas of Meghalaya, which are 80-90 Kms from the factory site. Access to quality limestone and coal used in production of cement at near by locations, help it in producing BIS quality cement at competitive prices. Further, there are no administrative restrictions on the mining of coal and limestone, ensuring ease in procurement of the same.

Its subsidiaries:

1.Company has the following companies as its wholly owned subsidiaries: Badarpur Energy Private Limited (BEPL): BEPL is setting up a 6MW Biomass captive Power Plant at Badarpurghat, Dist Karimganj, Assam. The cost of power produced by BEPL shall be 2.25/- unit.

2.Cement International Limited (CIL): CIL has set up a 300 TPD Cement Grinding unit at Badarpurghat, Dist Karimganj, Assam and has commenced the commercial production in the month of April, 2007.

3.Meghalaya Minerals & Mines Limited (MMML): MMML has set up a 800 TPD Crusher unit at Jaintia Hills, Lumshnong, Meghalaya has commenced the commercial production in the month of April, 2007.

Its Subsdiaries companies are also entitled to several insenntives and subsidies as under mentioned, after coming into their commercial production.

a) 100% Central Excise duty exemption for a period of 10 years.

b) 100% Central Sales tax/ 99% VAT exemption up for a period of 9 years

c) 100% Income-tax exemption under section 80 IC for a period of 10 years subject to Minimum Alternate Tax U/s 115JB of Income Tax Act, 1961.

d) Insurance subsidy, being 100% premium payable under Comprehensive Insurance Scheme, 1997 by the Government for a period of 10 years.

e) 3% Working Capital Interest Subsidy payable by the Government for a period of 10 years.

Customer Base: It has a diversified customer base consisting of individuals, contractors, builders, institutions and government agencies. Its main institutional and Government customers are Director General Of Supplies & Disposals (DGS&D), 19th Assam Rifals, Executive Engineer Rural Development, ONGC, BSF, etc.

Thus, Barak Valley Cement Limited, is a North-East based small sized cement manufacturing company. It is coming out with an IPO through the book building route. However, offlate due to too much government intervention and slow down of the real estate sector, the cement industry has witnessed a slump.

Barak Valley Cements Limited has fixed the price band for the IPO at Rs. 37 to Rs. 42 per equity share of face value Rs. 10 each. Barak Valley Cement IPO opens for subscription on Monday, 29 October 2007 and closes for subscription on Thursday, November 01, 2007.

Now what to do?? Should one subscribe to IPO?? This part is for the Premium and Quickie Group members.