SAIL to invest Rs15,000 cr, may dilute govt stake

SAIL to invest Rs15,000 cr, may dilute govt stake


Kolkata: Steel Authority of India (SAIL) would invest Rs12,000-15,000 crore over the next five years in modernisation and technology to sustain its current production capacity.

“Out of Rs53,000 crore proposed revised investment till 2012, we will have to invest Rs12,000 - Rs15,000 crore in areas to maintain, modernise and upgrading the technology to sustain the capacity in our existing steel plants," SAIL chairman S K Roongta told reporters on the sidelines of a national HRD meet here.

There is cost overrun by the company from earlier estimate of Rs49,000 crore. The company has lined up major expansion of capacity of hot metal by 26 million tonne in 2012 in their revised corporate plan as against 22 million decided earlier, he said.

The proposed debt equity ratio for the Rs53,000 crore modernisation and expansion would be financed through internal accruals. “We hope to raise resources for the expansion from a mix of internal accruals and debt. We propose debt equity ratio of 1:1," Roongta said.

“We will look into other options including dilution of government stake if there is need of funds. However, we have not thought anything now," he added. Ronngta said the company will place major orders for the project by this year to meet the target deadline. When asked about steel prices, Roongta said the steel prices were stable.