Jindal Woos Fis To Part-Fund Mill Project

Jindal Steel & Power Ltd (JSPL) is in talks with financial institutions to raise around Rs 210 crore for its rail mill project, which is scheduled to be operational by March 2002.

Naveen Jindal, vice-chairman and managing director, said the total cost of the project is around Rs 350 crore. "We plan to raise 60 per cent of the cost via debt, while the remaining will be raised through internal accruals," Jindal said.

He confirmed that the group is in talks with major institutions, but refused to divulge details.

In April this year, the company had acquired one of the largest rail and structural mills in South Africa from Iscor at over $10 million. The company is relocating this rail mill to Raigarh in the newly formed Chhatisgarh state.

This is expected to be the first rail mill in the private sector and would break Steel Authority of India Ltd's (SAIL) monopoly in the sector. Talking about the forthcoming state-of-the-art rail mill project, Jindal informed that while SAIL's Bhilai steel plant manufactures 13 metre long rails, which is welded and used by the Indian Railways, JSPL's rail mill will manufacture 78 metre long rail.

The rail mill's capacity is expected to be around 0.8 million tonne, Jindal informed.

This will also be the country's first mill to produce parallel flange beam which has applications in power plants, bridges and housing sector.

Meanwhile, JSPL has achieved financial closure for setting up a 55 mw captive power plant at the cost of Rs 225 crore at its coal-based sponge iron manufacturing facility in Raigarh.

The company will receive a total loan of Rs 150 crore from two financial institutions -- ICICI and IDBI -- while the remaining Rs 75 crore will be met through internal accruals. The captive power plant is expected to get operational by September 2001.

The company is targeting a net profit of Rs 100 crore this financial year. It also hopes to achieve a turnover of Rs 500 crore in this fiscal. For the nine months period ended March 31, 2000, the company had made a net profit of Rs 66 crore and an annualised earning per share of Rs 62 per share.