SPS plans fourth TMT price hike

Kolkata-based SPS Steel & Power has hiked TMT bar prices three times this month, on the back of rising input costs.

Addressing a press conference, Bipin Vohra, chairman and managing director, SPS Steel & Power said, the surge was a results of galloping raw material prices. SPS increased prices on March 1, 5 and 10 and the current prices were at Rs 43,000 per ton.

Vohra said, the company was contemplating another hike this month.

He said that in less than three months, sized ore prices increased from Rs 4,000 per ton to Rs 5,600 per ton while lumps moved from Rs 800 per ton to Rs 2,000 per ton. Ferro alloys increased from Rs 40,000 per ton to Rs 69,000 per ton and metallurgical coke, largely imported, rose from $250 per ton to $600 per ton.

Vohra said, despite the surge, margins had come down from Rs 1,500 per ton during the slack season to Rs 500 per ton, now.

SPS has entered into an understanding with Indonesia-based PT Kartika Selabumi Mining for hard coking coal. Vohra said, in the first stage it would be explored whether there was any possibility of mining there.

According to the arrangement, SPS would have an offtake agreement for 40 per cent once it was mined and the balance at market value.

SPS was also looking at diluting around 10 per cent stake to private equity players to raise Rs 250 crore.

Vohra said, the company had planned an initial public offering (IPO) this year but the plan was deferred by a year.

The funds would be used to fund the company's expansion projects.

The group was increasing exposure in the education and hospitality sectors while downsizing entertainment.