Torsteel to up stake in Orissa Sponge

The Torsteel Group, the promoters of Orissa Sponge Iron, is increasing its stake in the company by 10 per cent through preferential allotment.

Sources in the company said the allotment is aimed at funding expansion plans of Orissa Sponge.

The promoters would infuse around Rs 5 crore through this issue.

The company's board has proposed to allot 11.80 lakh equity shares to the promoters for which an extraordinary general meeting has been convened.

A company official said the preferential issue will be at a price closed to Rs 40.

The share price of Orissa Sponge is now hovering at around Rs 50-51 range.

Company sources said promoters would pick up stake in Orissa Sponge mainly through Torsteel Research Foundation in India (TRFI).

The promoter group now holds around 62 per cent stake in the company through group entities such as Torsteel Foundation, TRFI Investment, IPICOL and Unitech Investment.

IPICOL holds the most "" 25 per cent "" followed by TRFI Investment and Torsteel Research Foundation.

"The company is doubling its installed capacity of sponge iron from the present one lakh metric tonne to two lakh metric tonne per year at Keonjhar in Orissa," said a company official.

He informed that besides capacity addition, the company is also planning to double the generation capacity of its captive power plant.

The capacity of the plant currently is around 10 mw. It is likely to be increased to 20 mw.

Torsteel registered a revenue of Rs 34 crore in the quarter ended September 2004 and booked a net profit of Rs 2.5 crore. The revenue for the whole 2003-04 was around Rs 107 crore.