Gujarat NRE Coke for Rs 250 cr pvt placement

Gujarat NRE Coke will opt for private placement of equity for raising Rs 250 crore to fund its projects, which include its capacity expansion plan at the newly acquired mine in Australia, expansion of the metallurgical coke manufacturing plant at Dharwar in Karnataka and requirements of working capital.

According to company officials, a sum of Rs 150 crore will go into raising the capacity of the Australian mine from 1.3 million tonnes per annum to two million tonnes. Besides Rs 50 crore will go into the capacity expansion of the Dharwar plant and another Rs 50 crore will be used as working capital.

A couple of months back, Gujarat NRE Coke took over control of an Australian mine and along with three more units at Jamnagar and Bhachau in Gujarat besides Dharwar unit in Karnataka, Gujarat NRE Coke is now the largest non-captive manufacturer of low ash metallurgical coke in India, said Arun Kumar Jagatramka, the managing director of the company in Ahmedabad on Sunday.

"We expect to reach a turnover of over Rs 500 crore for the 2004-05 fiscal, with exports being between 10 and 20 per cent," said Jagatramka.

The company observes a fiscal from October to September. Gujarat NRE Coke was the first Indian company to export metallurgical coke to Brazil in July 2004 and has bagged a second order from Brazil.

Besides, another export order from South Africa has been bagged also, Jagatramka said. For the fiscal ended September 2004, Gujarat NRE Coke reported revenues of Rs 285 crore, an increase of 103.19 per cent over the previous year. Its post tax profit grew 444 per cent to Rs 90.78 crore.

Commenting on the method of raising the Rs 250 crore, Jagatramka said, "It will be through private placement of equity. And most of the takers will be FIIs".

Metallurgical coke is an essential raw material for many industries, with integrated steel plants, secondary steel sector, foundries and others using the product as fuel.

Coke is a derivative of coking coal and plays an important role in metallurgical processes. The conversion of coal into coke involves increasing the carbon content in the product, thus increasing yield and efficiency in furnace operations.