As demand for steel grows in India, the steel ministry had set a target of 120 million tonnes per annum, by end 2012; Tata Steel more than doubles Q3 profit
India is not likely to achieve its ambitious plans to produce 120 million tonne per annum (mtpa) of steel by the end of 2012, a top Tata Steel official has said.
"I don't think we will produce 120mtpa by the end of 2012, from the current production capacity of 67mtpa, as we are still a net importer," Hemant Nerurkar, managing director, Tata Steel, told Moneylife on Tuesday.
The Indian steel ministry aims to produce 120mtpa by the end of 2012, to become the second largest steel producer in the world. According to the World Steel Association, the country is today the world's fifth largest steel producer.
Yesterday, Tata Steel, the world's seventh largest steel producer, reported an impressive growth of 112% in consolidated net profit for the third quarter ended December, on the back of growing demand and high product prices. The company (including its European unit Corus) recorded a net profit of Rs1,003 crore in the quarter from the Rs473 crore in the previous corresponding period.
The company's consolidated net sales grew by around 10% to Rs28,606 crore, over the Rs26,067 crore last year. The company's Indian operations did better than the European operations in the third quarter. The Indian operations reported sales of Rs7,397 crore, up 16% from a year earlier, while the European unit's sales stood Rs17,940 crore, up 7% from a year earlier.
The Tata Steel stock price gained nearly 4.5% to Rs644.15 on the Bombay Stock Exchange today, compared with the benchmark Sensex which stayed more or less flat.
"India's demand for steel is expected to grow by 10%-12% this year as demand from the auto sector is surging. We aim to provide one million tonnes of auto products for the auto industry," Mr Nerurkar said. "We are on track to achieve our volume target of 6.4 million tonnes for this financial year."
About steel prices, the Tata Steel managing director said, "Prices will be determined by international trends and we will be in a position to pass on the price hikes to our customers."
In 2011-2012, Tata Steel will focus on debottlenecking its India operations to meet the growing demand. "To maintain our market share we will focus on debottlenecking our Indian operations until the expansion programme at the Jamshedpur plant is completed," Mr Nerurkar said.
The Jamshedpur programme is expected to be completed by December 2012. Last month, Tata Steel raised Rs3,477 crore through a follow-on public offer. The company intends to spend Rs1,875 crore for the Jamshedpur expansion programme and Rs1,090 crore will be used to pay the redemption of some maturing redeemable non-convertible debentures.
The company has started ground work for its 6 million tonnes capacity Orissa project and it is looking for mines which will provide iron ore for at least for 30 years.
State Bank of India will raise Rs2,000 crore
State Bank of India will raise Rs2,000 crore from the market through a retail bond issue that will open on 21st February.
The bonds will attract coupon rates between 9.75% to 9.95% for retail investors.
The issue is of Rs1,000 crore with an option to increase it by a similar amount if the market demands it, and is part of the bank's planned Rs10,000-crore retail bond programme in FY11 through FY12, to shore up its Tier 2 capital.
The 10-year bond will offer a coupon of 9.75% to the retail investor, the 15-year bond will fetch 9.95% to him. The bonds that will open on 21st February and close on 28th February will be listed on both the BSE and NSE.
Sundaram Mutual Fund new issue opens on 16th February and closes on 1st March
Sundaram Mutual Fund has launched Sundaram Fixed Term Plan-AK, a close-ended income scheme.
The objective of the scheme would be to generate income with minimum volatility by investing in debt and money market securities, which mature on or before the maturity of the scheme.
The new issue opens on 16th February and closes on 1st March. The minimum investment amount is Rs5,000.