Sesa Industries Ltd, a subsidiary of Sesa Goa, will invest close to Rs 1,000 crore in increasing capacity of producing pig iron from 0.27 million tonne to one million tonne over a period of two years, according to a company official.
Declining to give specifics, the official said, ?A part of the investment will be utilised in expanding capacity at our existing plant in Bitholim (Goa) and the remaining will be utilised to set up a new plant close to our existing plant.?
He was speaking on the sidelines of the 7th Asian Steel Conference here on Friday.
The company has already acquired 70-80 acres of land to go forward with its organic growth plan.
?We have already started placing orders for the equipment,? the official added.
Sesa Goa shares on Friday were down Rs 47.65 or 1.33% to close at Rs 3,548.55 on the Bombay Stock Exchange.
Sesa Goa Ltd holds 88.5% of the equity of Sesa Industries with the remainder having been issued to the equity holders of Sesa Goa on a rights basis.
According to Tarang Bhanushali, an analyst with India Infoline, ?The capacity expansion would fetch good returns to the company as the prices of pig iron have increased.?
Prices of pig iron are currently trading at Rs 25,300 including sales tax and VAT. ?We have witnessed a 30% Y-o-Y growth in the prices of pig iron. However, on an average, we expect the prices to trade around Rs 25,000 to Rs 26,000 levels,? he added.
