The Hindu Business Line : Vizag Steel Q3 sales up at Rs 2,229 cr

Bids for Rs 5,500-crore worth projects would be finalised before March
The board has approved creation of additional capacity 2009-10
To recast equity structure, may consider IPO

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Hyderabad Feb. 9 Rashtriya Ispat Nigam Ltd (RINL), Visakhapatnam, has embarked on yet another round of expansion that would entail an outlay of Rs 2,500 crore. This is being complemented by a Rs 500-crore capacity expansion from 3.6 million tonnes to 4 million tonnes.

Riding the buoyancy in the steel sector, RINL has, during the third quarter, pegged its sales at Rs 2,229 crore, up nine per cent over Rs 2,046 crore for the corresponding period last year.

During the first nine months, it registered gross sales of Rs 6,143 crore, up 10.4 per cent against Rs 5,817 crore for the corresponding period last year.

Addressing a press conference here today to announce the company's performance and expansion plans ahead of the silver jubilee celebrations, the Chairman and Managing Director of RINL, Mr Y. Siva Sagar Rao, said the company was concentrating on value-added products, particularly special steels. About 8 lakh tonnes of special steel were sold during the first nine months, reflecting a growth of over 39 per cent.

After first two decades, RINL has turned around and embarked on a major expansion project that would see the total capacity going up from 3.6 million tonnes now to 16 million tonnes with an outlay of Rs 25,000 crore by 2017-18.

Current expansion

Referring to current expansion, Mr. Rao said the bids for Rs 5,500-crore worth projects would be finalised before March.

The company's board has approved creation of additional capacity by 2009-10 with an outlay of Rs 2,500 crore. The VSP expects to shortly submit the report to the Steel Ministry for necessary approvals, he explained.

VSP has deposits of over Rs 6,500 crore and generating cash of over Rs 2,000 crore annually. It is proposed to take up expansion with 1:1 debt equity ratio.

The Director - Finance, RINL, Mr PK Bishnoi, said RINL was in the process of recasting its financial structure. Of the Rs 8,000 crore in equity, Rs 3,000 crore was in the form of redeemable non-convertible debentures.

It is proposed to restructure the nature of equity and this is subject to necessary Government clearances.

Apart from equity restructure, RINL is looking at earmarking about 5 per cent of the equity for employee stock option plan. Subject to necessary clearances, RINL may consider a public issue some time next year, as this is part of the Government plan to offer about 25 per cent equity to public.