Shree Steels plans Rs 224 cr spread

Shree Precoated Steels, a member of the Rs 1,300-crore Ajmera group, has embarked on a Rs 224 crore expansion in the cold rolling mill (CRM) and galvanising prepainted (GP) and colour-coated (CC) products.

The production capacity of the CRM will be increase from 220,000 tonne per annum (tpa) to 540,000 tpa and that of CC products will be raised from 90,000 tonne to 120,000 tonne.

The company has already installed a high speed galvanising line to produce over 300,000 tonne of GP product.

A spokesperson of the company said the CRM capacity will be hiked by installing the high speed 4-high CRM with flatness control system and level-2 automation to produce finished cold rolled coils at a top speed of 1,400 mpm.

For CC products, near infra-red curing technique-based colour coating line will be installed.

The expansion projects are expected to put in place key capabilities that will make the company a leader in the domestic steel market and a significant player in the export market.

The company's exports in 2004-05 rose 56 per cent from Rs 308.21 crore in 2003-04 to Rs 481.79 crore. The induction of new member countries into the European Union has opened up new markets for exports for CR, GP and CC products.

The proposed expansion will be financed through term loans, rights issue of equity shares and internal accruals.

The Allahabad Bank has given a term loan of Rs 50 crore. State bank of India, its associates and other financial institutions have also sanctioned loans.

The company proposes to raise Rs 51 crore from the rights issue. It has proposed to issue 2.55 crore equity shares in the ratio of one equity share of the company for every two shares held.

The shares with Rs 10 face value will be issued at a premium of Rs 10 per share. The stock is currently quoted at Rs 42 cum right on the Bombay Stock Exchange.

The Ajmera group has established itself as one of the leading residential and commercial property developers in the country.

The group also has a strong presence in cement, textiles, printing, IT and entertainment park.