Bhushan Steel defers $1 bn share issue

Bhushan Steel defers $1 bn share issue

New Delhi: Processed steelmaker Bhushan Steel has deferred plans to build a new plant and raise $1 billion through a share issue because of problems acquiring land in West Bengal and weak financial markets, its finance director said.

But Nittin Johari told the news agency the company expects to maintain a 25% margin and increase sales this year as costs for inputs such as coking coal and iron ore ease.

Economic uncertainty and a sluggish demand has prompted many global steelmakers, including ArcelorMittal and Tata Steel, to cut production, mainly in Europe.

Bhushan Steel, which has the capacity to produce 2.2 million tonnes of hot-rolled steel per year, has not cut production and has no plans to do so, Johari said.

Bhushan expects to increase sales by 25-30% this fiscal year ending March, sharply below the 52% rise in the first six months.

The company’s operating margin was 23% in the first half of the fiscal year, slightly lower than the 25% it hopes to clock for the whole year.