The Hindu Business Line : SPS firms up plans for Rs 40-cr public issue

SPS Steels Rolling Mills Ltd, manufacturer of the Elegant brand of TMT (thermo-mechanically treated) bars, has firmed up plans for a public issue of Rs 40 crore.

Subject to receipt of necessary approvals, the proposed public issue is slated to hit the capital markets within the next couple of months.

Speaking to Business Line, Mr Bipin Kumar Vohra, Chairman & Managing Director of the SPS group of companies, said that a draft prospectus has been submitted for SEBI approval. An application for listing on the NSE has also been made. There would be a premium of Rs 10 on the shares that would be on offer. Post-issue, the company's equity base would go up to Rs 29.60 crore from Rs 9.60 crore now.

Mr Vohra said the proceeds from the issue would be used to augment capacity at the company's production facility in Durgapur to 220,000 tonnes per annum, from 120,000 tonnes per annum now.

Besides TMT bars, which are manufactured under licence from Thermax of Germany, the Durgapur facility will embark on the manufacture of angles, channels and flats.

With a view to ensuring continued supply of raw material, the group is setting up a 220,000-tonne-per-annum capacity sponge iron plant in Jharsuguda, Orissa. Work on the first phase of the plant is scheduled to be completed by June this year.

In the second phase, work on which is expected to be over by March 2005, a 260,000-tonne-per-annum billet casting facility would be set up. The third phase of the project envisages the setting up of a 20-MW capacity power plant, a blast furnace and a 100,000-tonne-per-annum capacity rolling mill. Mr Vohra said that after setting up additional capacities, the SPS group would like to position the company's range of products in other parts of the country. Currently, its marketing initiatives are confined to the eastern region. "Soon, our marketing efforts would be on an all-India basis, especially for our long products."

The SPS group hopes to end the current fiscal with a turnover of Rs 350 crore, up from Rs 300 crore last year. With the projects under implementation going on stream, the group's turnover is expected to go up to Rs 600 crore in 2004-05 and to Rs 1,000 crore in 2006-07, according to Mr Vohra.