PSL to get Rs 96 cr from IFC for capex

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has agreed to provide $20 million (about Rs 96 crore) as financial support to PSL Ltd, the country's largest pipe manufacturer.

The financing will support the expansion of PSL's production capacity to meet the domestic and international demand for large-diameter steel piping for use in oil, gas and water applications.

Based in eastern India, PSL's expansion will help satisfy demand for piping that has been generated from recent gas finds in the Krishna-Godavari basin.

The project will help the company improve its cost-competitiveness, productivity, product quality, and environmental performance.

IFC's financing comprises an equity investment of $5 million (about Rs 24 crore) and a loan of $15 million (about Rs 72 crore), which will support the expansion of PSL's installed capacity for large-diameter steel pipe manufacturing from 6,75,000 tonne to 14,25,000 tonne a year.

"IFC's investment in PSL is helping a local player enhance its regional presence. This is in line with IFC's mission to promote sustainable private sector investment in emerging markets," said Iyad Malas, IFC's director for south Asia.

"It will also allow PSL to play a bigger role in providing the large-diameter piping that is a critical part of India's infrastructure," he added.

Ashok Punj, managing director, PSL, said: "IFC is playing an important part in our expansion plans and is helping us strengthen our financial position. IFC is also helping us upgrade our corporate practices in environmental and occupational health and safety management."

PSL is engaged in various types of pipe coating and pipe manufacturing with plants across Daman, Kandla, Nani Chirai, Chennai, Varsana and Vishakhapatnam.

In its coating business, the company undertakes coal tar enamel coating, internal epoxy coating and three-layered polyethylene coating. These coated pipes are used for transportation of gas, oil, water and petroleum.

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Confidence booster

Financing will support the expansion of PSL's production capacity for large-diameter steel piping used in oil, gas and water applications

IFC's funding comprises an equity investment of about Rs 24 crore and a loan of about Rs 72 crore, which will support the expansion of PSL's installed capacity