The Hindu Business Line : Indal shares: Hindalco extends buyback offer

INDIAN Aluminium Company Ltd (Indal), whose 96.37 per cent of the total paid-up capital share is controlled by an Aditya Birla Group outfit — Hindusthan Aluminium Company (Hindalco), has received "in-principle" approvals for delisting its shares from the Mumbai, Koltaka and National stock exchanges. Accordingly, the trading of Indal's shares has been suspended in these exchanges, according to a company source.

Shareholders of Indal who could not participate in earlier offer/ exit option, which closed on August 2, 2003, have been given the opportunity to tender the shares held by them in favour of Hindalco at a consideration of Rs 120 per share from January 16, 2004 to February 2005.

The sources said that expansion of smelting capacity from 57.2 lakh tonnes to 65 lakh tonnes per annum at the company's Hirakud smelter in Orissa has been completed by transferring of electrolytic pots from the "defunct" Belgaum smelter in Karnataka, while coal production from the recently developed Talabira-I captive coal mine has started.

The ongoing expansion of its captive thermal power plant from 67.5 MW to 267.5 MW, is expected to be completed as per schedule.

While indicating that Indal will remain a separate corporate identity, the source said that the management is confident of strengthening the company's market position in alumina and aluminium products, over the remaining part of the current fiscal. This is because of the fact that the outlook on the domestic front at macro level is positive with an 8 per cent annualised growth over the second quarter of the current fiscal. Domestic aluminium consumption would be buoyed by this trend and is expected to grow at around 7 per cent per annum over the coming years.

Incidentally, international metal prices moved up significantly during the last quarter and have crossed the psychological barrier of $1,600 per tonne. Industry analysts forecast prices to remain range bound at $1,500 to $1,600 per tonne over the coming months. Consequent to the surge in aluminium consumption, global spot prices of alumina have also soared over the past few months. With persistent tightness in the global markets, alumina prices are currently hovering around $400 per tonne.

The Indal management feels that the international market trend will help the company a lot as it exports over 37 per cent of its fabricated items and a substantial quantity of alumina.