MSP plans steel unit

A captive power plant will also be set up at the facility

The Kolkata based MSP group is planning to tap the capital market with an initial public offering (IPO) to part finance its ambitious Rs 124 crore sponge iron and captive power plant in east Chhattisgarh.

The sponge iron and captive power plant will be under MSP Steel and Power Ltd.

Incidentally, MSP Group has presence in sponge iron, mild steel ingots and construction bars in the eastern region.

It has sponge iron manufacturing facilities in West Bengal, Orissa, Jharkhand and Chattisgarh.

The group is hoping to push up sales to Rs 450 crore in 2005-06 after the completion of the project.

MSP group currently has a combined turnover of around Rs 290 crore.

The director of MSP group, Saket Agarwal informed that it is planning to raise Rs 16 crore through the IPO for the Chhattisgarh plant.

"It will be an integrated steel complex in eastern part of Chhattisgarh. We are tapping the market later this month," he said.

According to him, the plant will have a capacity of 2 lakh ton of sponge iron, one lakh ton steel melting, 85,000 TMT bars and a 24 megawatt (Mw) captive power plant.

"The majority of the Rs 124 crore investment will be in sponge iron and captive power plant. We are investing around Rs 50 crore in captive power plant and Rs 38 crore in sponge iron. The company is also building a railway siding for the project," Agarwal said.

He claimed that after the completion of the project, the group will have sponge iron capacity of around 5.25 lakh ton per year, which Agarwal claimed as one of the highest in the country.

"We shall be the second biggest after OP Jindal group as far as coal based sponge iron is concerned," he said.

Commenting on the project, the MSP director said the group has already tied up Rs 76 crore term loan for the project.

Besides, the promoters are bringing in Rs 33 crore as equity apart from the Rs 16 crore proposed IPO.

"We hope that the project will be operational by the end of September 2005," he added.