The Hindu Business Line : RINL rules out IPO to raise funds for capacity expansion

Mr H.S. Chhatwal, Director (Commercial), said that the project was likely to be funded with a debt-equity ratio of 1:1. Currently, the debt-equity ratio of RINL was 0.5:1.

"Moreover, the current scenario of the steel industry is quite upbeat and RINL can raise substantial amount of debt. So, there is hardly any need to divest stake and raise funds," he added.

He was speaking to newspersons after addressing the 35th AGM of the Steel Wire Manufacturers Association of India. According to him, RINL would raise the equity portion from its internal accruals.

RINL was contemplating floating an IPO to fund a portion of its capacity expansion programme after returning to black in 2003-04. The company was also to have its performance evaluated at the bourses.

Govt may not be keen on IPO: Sources, however, said that the Union Steel Ministry might not be too eager to divest Government stake as it might lead another face-off with the Leftists, who are against divestment of profit-making public sector units.

Meanwhile, the expansion programme of RINL is yet to get formal clearance from the Public Investment Board (PIB). According to Mr Chhatwal, it is likely to come by the end of this month.

High input costs: He said that rising coking coal prices would affect the company's bottomline in the current fiscal. However, he was reluctant to give specific figure as to what extent it would suffer. "It is difficult to give a particular figure because so many significant factors."

RINL is taking measures to reduce the impact of rising coking coal prices. As a first step, the company has started coal dust injection. The new blast furnaces that would be coming will have technology built in them. The old blast furnaces will have the coal dust injection installed within the next 5-6 months. It will substantially reduce the dependence on imported coking coal."

The company will again send a team to the US and Canada to form a joint venture with any of the global coal majors located in that region.

This will be second such RINL team visiting that part of the world. Mr Chhatwal, however, said that the global coal players are no longer eager to join hands with the importers.

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