ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Ponni Sugars and Chemicals

Monnet Ispat MONNET ISPAT, promoted by Sandeep Jajodia and Jindal group's flagship company, Jindal Strips, is setting up a project for the manufacture of non-coking coal- based sponge iron with a capacity of one lakh TPA in district Raipur, Madhya Pradesh. The project is sited in a centrally notified backward area in village Kurud, eight kilometres from Raipur, with the advantage of being located in the iron ore and coal producing area and well connected by air, road and rail. Jindal Strips is an existing, listed and highly profitable company and is amongst the leaders in the steel industry in India. Its product range comprises stainless steel, ferro chrome, cold rolled steel, sponge iron, etc Jajodia, with experience of over six years in manufacturing, international marketing, leasing and finance, etc, has promoted Monnet Eerro Alloys, manufacturing high carbon ferro chrome. Jindal Strips, under the chairmanship of O P Jindal, has developed indigenously the technology to manufacture sponge iron using the non- coking coal route at a substantially lower project cost as compared to other similar projects. It has already set up, using its technology, two modules of one lakh TPA each at Raigarh, Madhya Pradesh, to manufacture sponge iron which arc running successfully. It is now setting up further manufacturing facilities to increase the capacity to six lakh TPA, O P Jindal is chairman of Monnet Ispat and Sandccp Jajodia the managing director of the company. Two important features of Monnet Ispai's project are its low project cost, which at Rs 36 crore is amongst the lowest in the industry, and the other is the 100 per cent buyback of its entire production by Jindal Strips for the first five years from 1992. As such the company does not envisage any marketing problem. In this light, leading financial institutions such as the ICICI, the UTI and Credit Capital Venture Fund have participated in the company's equity and NCDs to the extent of Rs 8.20 crore. The project is slated to commence production by August. The company expects to achieve 50 per cent capacity utilisation in the first year of operation and peak capacity of 80 per cent (output of 80,000 tonnes of sponge iron) from the third year. It is to earn cash profit amounting to Rs 3.56 crore and net profit of Rs 0.89 crore during the first year of operations. The company's financial projections, as appraised by the ICICI, are quite impressive. During 1993-94 (nine months), 1994-95 and 1995-96 its turnover is expected to be Rs 17.94 crore, Rs 31.10 crore and Rs 38.28 crore, respectively, and is expected to earn a net profit of Rs 1.14 crore, Rs 4.91 crore and Rs 6.09 crore in that order. However, since commercial production is now slated to commence in August instead of in June as was proposed, the profitability figure for the year will be for a seven-month period. In order to pan finance the project, the company is entering the capital market on June 21 with a public issue of 46,00,000 equity shares of Rs 10 each at par aggregating Rs 460 lakh. The company proposes to list its equity shares at Delhi, Bombay, Calcutta and Jaipur stock exchanges.

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