Ramsarup group plans Rs 476 cr steel unit at Kharagpur

Funds to come from internal accruals, promoters & loans; IPO not ruled out

The demand for steel billets, used for manufacture of rolled products, was on the rise and to meet this demand, the privately-held, Kolkata-based Rs 1115 crore Ramsarup group is putting up a Rs 476 crore integrated steel plant to produce about 2,91,000 tonne per annum of billets at Kharagpur in West Bengal along with a captive power plant as a backward integration project.

"The new unit will be called Ramsarup Lohh Udyog Ltd (RLUL), and after implementation of this project, the Ramsarup Group will be one of the very few companies in India producing finished wires from iron ore", group chairman Ashish Jhunjhunwala told Business Standard.

The group would be funding its expansion through a mix of internal accruals, contribution from promoters, loans from banks and government agencies like WBIDC, and possibly a public issue of shares, Jhunjhunwala indicated.

The first phase of the Kharagpur project would comprise a mini blast furnace, a sponge iron plant, a steel melting shop with billet caster and the 20 MW captive power plant, he added.

The project has been prepared by MN Dastur & Company and MECON Ltd has been assigned for providing the detailed engineering for the project. In the second phase, a rolling mill for production of long products, along with sinter plant, coke oven batteries, thermal power plant and washery will be set up.

The Rs 476 crore integrated steel complex was being set up as a backward integration project by the city-based Ramsarup group.

"The group has requested the government of West Bengal for allotment of an additional 500 acres of land to produce 1.5 million tons of steel by year 2009-10 at Kharagpur", group chairman Ashish Jhunjhunwala said. Total group turnover in fiscal 2004-05 was Rs 1,115 crore and total group net worth Rs 109 crore.

The group was also involved in generation of wind-based power.

Jhunjhunwala said the group at present had two manufacturing units under a holding company called Ramsarup Industries Ltd, one named Ramsarup Industrial Corporation (RIC) at Kalyani Industrial Area in West Bengal, and the other being being Ramsarup Bars & Rods (RBR), at Shyamnagar, north of Kolkata.

The group had other companies - Ramsarup Vyapaar Ltd (RVL), which makes thermax TMT re-inforcement bars along with its sister company Ramsarup Utpadak Ltd (RUL), and has a capacity of 57,000 tonne per annum.

The wind turbine-based power generating unit was at Maharastra and that company was also putting in more machines in the current financial year, he added.

The company was at present listed on the Calcutta Stock Exchange only but the process of listing of shares on BSE and NSE had been initiated, said Jhunjhunwala.