SAIL to invest Rs100 crore to revive Malvika Steel

New Delhi: State-owned Steel Authority of India Ltd (SAIL) today said it will invest Rs100 crore to revive its Uttar Pradesh unit, formerly known as Malvika Steel, which the steelmaker acquired last year, reports PTI.

"The total cost of Jagdishpur SAIL Unit's (JSU) phase-1 revival has been estimated to be Rs100 crore," the company said in a statement here. SAIL acquired the defunct Malvika Steel for Rs209 crore last year and rechristened it as JSU.

As part of the revival plan, SAIL will set up a steel mill at a cost of Rs46 crore to produce items required by infrastructure and construction companies.

"The entire team of JSU has to work with exemplary dedication, zeal and commitment to fulfil the objectives of acquiring the unit," said steel secretary Atul Chaturvedi, who along with SAIL chairman C S Verma laid the foundation stone for the mill.

The TMT bar mill has an annual production capacity of 1.5 lakh tonnes per annum (TPA).

"The proposed facilities and product-mix envisaged in phase-1 also include a 10,000 TPA cold forming line and a 13,000 TPA corrugation line," the statement added.

Verma said SAIL also envisages resumption of integrated iron and steel production at JSU under the second phase of its revival plan, for which a feasibility report has been prepared.

Going forward, SAIL said it will also set up a 475-MW gas-based power plant at Jagdishpur through a joint venture.

"The process for identification of a suitable partner has started," it added.
The country's largest steel-maker plans to enhance its annual production capacity to about 23 million tonnes from the current output of around 14 million tonnes with an estimated investment of Rs 70,000 crore by 2012. SAIL plans to further enhance its annual capacity to 60 million tonnes by 2020 to cater to anticipated demand on account of rapid growth of the infrastructure sector.

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COMMENTS

Vispi Bhathena

6 years ago

Sir,I have1500 Malvika Steel shares, I was highly pleased to read your article on SAIL to invest to revive Malvika Steel.
Please advice me regarding what will happen to my shares as I have not received any news from SAIL and what I shoud further do.
Thank You.

Engineers India FPO to open on 27th July

The government will raise Rs1,100-Rs1,200 crore by divesting its 10% stake in the engineering company. Is the FPO worth participating?

State-run Engineers India Ltd (EIL) is slated to hit the markets on 27 July 2010 with its follow-on public offer (FPO). EIL is offering 3.36 crore shares with a face value of Rs5 each. The company has set the price band at Rs270-Rs290 per share. On Monday, the stock has plunged 6.2% at Rs316.75 on the Bombay Stock Exchange (BSE).

The issue opens for qualified institutional buyers (QIBs) on 27th July and for retail and non-institutional investors from 30th July. The government is expecting to raise Rs1,100-1,200 crore through a 10% stake dilution. Post-FPO, government's stake will reduce to 80.40% from the current level of 90.4%.  

EIL has provided consultancy and project implementation services to refineries, petrochemical complexes, offshore platforms, pipelines, ports, fertilizer and mining and metallurgy projects. In infrastructure, it has provided engineering consultancy services to airports, highways, flyovers, bridges and water projects. While EIL has a good track record and is the pre-eminent engineering and consultancy firm in the country, it continues to be hampered by government controls.

EIL posted a net profit of Rs114.56 crore for the quarter ended 30 June 2010 on net sales of Rs606 crore. For the year ended 31st March 2010, it reported a net profit of Rs439 crore. It had a negative cash flow of Rs130 crore as on 31 March 2010.

Its price earnings ratio (P/E) stands at 20.47 (lower band) and 22 (at the upper band) based on the EPS of 31st March, 2010 and 21.32 (annualised) as per the EPS of quarter ended 31st June, 2010.  

Its net profit has dipped by 8% in the first quarter of this fiscal at Rs114 crore compared to Rs125 crore in the fourth quarter of FY 2009-10. Its net sales also saw a decline of 5% in the June quarter 2010 at Rs606 crore from Rs640.34 crore during the fourth quarter of FY2009-10.

Similarly, during the March quarter, EIL's net profit plunged 22% at Rs125 crore compared to Rs159 crore during the corresponding period last year. The company's net sales have grown at an average of 39% over the last five quarters while its operating profit has increased at an average rate of 69% over the same period.  

The company has an order book of Rs6,236 crore as on 31 March 2010. HSBC Holdings Plc, ICICI Securities, SBI Capital Markets and IDFC Capital are lead book running managers to the FPO.

The company has set aside 7.12 lakh shares for employees and 1.15 crore shares are reserved for retail investors. Retail investors and employees will be entitled to the same discount through the book building route.  

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COMMENTS

k a prasanna

6 years ago

After the recent bonus and split - the company had issued bonus shares in the ratio of 2:1, it had also gone for a stock split, with the face value of a unit being cut to Rs 5 from Rs 10, the company has Rs 168.45cr equity capital consisting of 33,69,36,000 equity shares of Rs 5/- each. Assuming that the company achieves a growth of 30% plus for the FY 11, the EPS would be around Rs 17/- The shares are presently quoting around Rs 340 in the exchanges. (28 PE). Because of low floating stock, the valuations are on the high side.

The recent NMDC’s FPO offer is still quoting below the offer price. The BRLMs and the government should realistically price this issue, leaving some thing for the investors.
RECOMMENDATIONS:
If the issue is going to be priced by less than 15 PE of its FY 11 expected earnings – that is less than Rs 240/- APPLY. Other wise skip the issue.

Coal India likely to file draft IPO papers by next week

New Delhi: State-owned Coal India (CIL) is likely to file a draft prospectus next week for its initial public offering (IPO), billed to be India's biggest issue, through which the government expects to raise about Rs15,000 crore, reports PTI.

"The company's board is meeting on 5th August to finalise the draft red herring prospectus (DRHP) and in all probability, papers will be filed with market regulator Securities and Exchange Board of India (SEBI) within the first week of August," a person in-the-know of the development told PTI today.

Last month, the Union Cabinet had cleared the proposal to divest 10% of the government's stake in the world's largest coal miner through an IPO. The Centre holds 100% equity in the company.

Earlier, coal minister Sriprakash Jaiswal had said the share sale could be launched in October, terming the month "auspicious", as it coincides with the Durga Puja celebrations.

Sources said the IPO is expected to be launched on 18th October and will close on 21st October. The government is looking to raise between Rs12,000 crore to Rs15,000 crore through the share sale.

Although CIL's IPO was originally planned for August-September, it was delayed due to opposition from trade unions and political parties to the government's proposed 10% stake sale.

Coal India produced 431.5 million tonnes of coal in the last fiscal. The country's coal output stood at 531.5 million tonnes in 2009-10. The company is one of the cheapest suppliers of the raw material in the world, selling its coal at 50% cheaper rates than its global rivals.

Anil Ambani Group firm Reliance Power's (R-Power) IPO in January, 2008, is the biggest IPO in India so far. R-Power had raised Rs11,500 crore through its IPO.

The government aims to raise Rs40,000 crore through disinvestment of PSUs this fiscal.

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