Ambar Singh Roy
Kolkata, May 18
JAI Balaji Group company Shri Ramrupai Balaji Steels Ltd has firmed up plans for an initial public offering of two crore equity shares of the face value of Rs 10 each through the book building process.
Proceeds from the IPO, which is likely to be open for subscription by the middle of June this year, would be used to fund the company's integrated steel plant that is being set up at Durgapur, West Bengal, at an estimated investment of Rs 277 crore.
According to Mr Aditya Jajodia, Managing Director of the Rs 650-crore turnover Jai Balaji Group, two mini blast furnaces, a TMT bar and wire rod mill and a sponge iron plant comprising the first phase of the project have already been commissioned. The second phase, comprising a 40 MW power plant, steel melting shop and a coal washery plant, would be commissioned by September 2006.
Mr Jajodia said the plant would produce 1,80,000 tonnes of steel billets per annum. Fifty per cent of this would be consumed in the company's rolling mill while the balance would be sold in the open market.
TMT bars currently manufactured by the company are sold under the "Balaji Shakti" brand name.
Mr Jajodia said the project has been granted "mega project" status by the West Bengal Government, which has offered several fiscal incentives such as a 75 per cent sales tax exemption for 15 years, exemption from land registration fee and a 50 per cent reimbursement of provident fund and ESI dues for a period of five years.
"We are essentially into semis, TMT and wire rods that are used extensively in the housing and infrastructure sectors. The boom in the housing and infrastructure sectors in India only augurs well for a company like ours," Mr Jajodia said, adding that Shri Ramrupai Balaji Steels Ltd was expected to notch a turnover of Rs 400 crore in the first 12 months of operations after the Durgapur plant is commissioned in totality.