Monthly Archives: July 2008

SBI Recovers Two Thousand Crore Rupees’ Bad Loan

State Bank of India is likely to report an improvement in its asset quality when it presents its first quarter results. According to top SBI sources, the bank has recovered bad loans worth around two thousand crore rupees during April-June 2008.

Top SBI executives, when contacted, refused to comment. SBI managing director S K Bhattacharya said, “We can’t divulge details before the first quarter results announcement”.

SBI’s credit quality had deteriorated during 2007-08, as it booked fresh bad loans worth Rs 2,700 crore, mainly on account of retail loans, and to some extent, mid-sized corporate loans. As on March 31, 2008, the bank had gross non-performing assets (NPAs) of Rs 12,837 crore compared with Rs 9,998 crore, a year back.

On the other hand, the bank is slated to make a provision of around Rs 1,000 crore against mark-to-market (MTM) losses of its investment. Out of this sum, around seven hundred crore rupees is expected to be provided for against depreciation of bonds the bank received from the government on account of its rights issue.

Banks are booking MTM losses against depreciation of bonds and equity investments during April-June 2008 period. Nevertheless, SBI is expected to clock double-digit growth in the first quarter to June 30, 2008 over the corresponding period a year back. This is despite the fact that demand for loans from sectors like commercial real estate and auto has slowed down.

Coming back to SBI’s bad loan management, government’s debt waiver-cum relief scheme would help SBI reduce its bad loans by another Rs 2,000 crore. SBI has waived overdues of around 25 lakh farmers, aggregating about Rs 7,000 crore. “It’s estimated that around 30% of the total waived sum had become NPAs,” another SBI insider indicated. Gross NPA stood at 3.04% as on March 31, 2008 while the net NPA stood at 1.78%.

Ceylon Glass Company To Sell Colombo Property

Ceylon Glass Company, a unit of India’s Gujarat Glass, has revealed it plans to sell a prime property valued at 700 million rupees near Colombo from where it has just shifted its production plant.

“The company plans to sell the 21 acre land located in the heart of Colombo in Ratmalana,” a company statement said. Read More »

SatyaVani In Talks With European REITs

Hyderabad-based real estate firm SatyaVani Projects and Consultants is in talks with European REITs to raise $150 million in private equity, which will form the bulk of the $190 million it plans to spend on projects in Hyderabad, Bangalore and Vishakhapatnam.

Company’s director Mr. P Surya Prakash said that besides private equity, SatyaVani Projects is looking at raising cash through a combination of internal accruals and private placement. He declined to name the potential investors.

A 5 million square feet medical tourism project in Hyderabad will be the biggest, costing $120 million and consisting of two hospitals, a health resort and service apartments.

In Bangalore, it will establish an eco resort and a housing project at an investment of $50 million. The company will spend another $20 million on residential projects in Vizag.

Problem With FDI In Real Estate

Before the globally-popular real estate mutual funds (REMF) take off here, RBI has raised a red flag. It has argued that the funds would lead to circumvention of foreign direct investment (FDI) in real estate that places limitations on foreign investors. Read More »

Closed Mills Creates Additional Realty Space

The closing down of more than 20 textile mills and 15 manufacturing units in the country in the last 6-12 months has led to creation of a surplus supply of industrial real estate. With more than 20,000 workers in the textile sector now jobless, demand for space around industrial belts has slowed down, and more supply is taking prices further south.

The rentals are down by 20-25 % in the industrial belts. It is estimated that more than 15 lakh sq ft of surplus area has been added in the market which is already depressed.

According to sources, with so much supply coming in and few takers, there are very few rental deals happening in the market. For the record, rentals in the Gurgaon industrial belt have come down to Rs 20-30 per sq ft per month from Rs 45-50 . Similar is the situation in industrial belts in and around Surat, Tirupur, Kundli, Panipat and Coimbatore.
Says Rakesh Vaid, chairman, Apparel Export Promotion Council (AEPC): “A lot of garment exporters are downsizing their operations and international market slowdown has dented the demand. We are not in a healthy shape and the government is contemplating withdrawing some of the sops given to us at the time of dollar depreciation. Crude prices are on a record high. To add to it cotton is very expensive. Indonesia and China have a very healthy growth rate but we will have to revise our target downward for this year. All these factors are sure to create some problem for real estate also.”

Many in the industry feel that slowdown in real estate in this sector will have major impact overall as many people park their surplus cash in these properties.

Says Pawan Swamy, MD (markets), JLLM: “The impact on the industrial real estate market is definitely there. Many industries are shifting operations to less expensive and more incentivised zones when they can no longer benefit from the economies of scale at their original locations . They leave behind considerable packets of prime land for development. Textile units, for instance, necessarily occupy considerable areas, further enabled with key utilities such as water and electricity.”

These factors have also put a dent on the fresh supply of industrial real estate. Even new plots which are being developed are not finding any takers in the market. Many small developers who are into this kind of development are find tough to sell the built up plots.

Realty Gloom Reflects Stock Price

The gloom over the realty sector is reflected in the stock prices of many companies. BSE Realty Index has been the worst performer so far in 2008, having shed more than 68.5% from its January peak. Analysts expect further erosion in valuations of realty stocks with the sector facing a slowdown, input costs rising, and little hopes of interest rates softening.

The sharp correction has led industry leader DLF to announce a buy-back as the management believes the current price does not reflect the intrinsic value of the shares. The company has earmarked eleven hundred crore rupees for the buyback at six hundred rupees per share.

Prabhudas Lilladher, brokerage, said, “Over the last few months, real estate developers have been caught in a vicious circle of sluggish demand and rising cost of capital. Availability of finance has been a problem with rising cost of debt and drying up of equity funding. There have been instances of developers borrowing at interest rates ranging between 24-36 % against 500% collaterals. The lack of liquidity is likely to impact deliveries, leading to project delays as well as postponement of new launches”.

According to Religare Securities, the realty market has witnessed a slowdown in registration volumes in a few cities on account of spike in property prices over the last six to eight months. Owing to this, most companies have fallen short of their sales targets for the quarter.

On a positive note, foreign direct investment flows witnessed a CAGR growth of 615% from financial year 2006 to financial year 2008.

Inflows in financial year 2008 stood at Rs 8,750 crore with the likes of Blackstone Group, Goldman Sachs, Emmar Properties, Pegasus Realty, Citigroup Property Investors, Lee Kim Tah Holdings, Salim Group, Morgan Stanley and GE Commercial Finance Real Estate making an entry.

In a situation where availability of finance is a key concern, brokerages remain positive on companies with large cash balances and have their funding requirements in place, thus enabling them to complete projects on schedule as well as take advantage of declining land prices. However, their view on the overall sector remains cautious.

Religare estimates a 35.3% rise in DLF’s first quarter net profit from a year ago, while HDIL is expected to post a mere 4.1% rise in the same period compared to last year.

Religare sees Peninsula Land posting 26.5 % revenue growth for the June quarter from last year with EBITDA margin of 28.1%. On the other hand, Prabhudas Lilladher expects Peninsula Land’s revenue to grow 70% YoY with EBIDTA margin of 54%. The growth in revenue will largely be backed by commencement of construction at Peninsula Business Park, where 50% has been pre-sold.

ICICI Pru Buys 50 % In DS Kulkarni Project

Real-estate firm DS Kulkarni Developers Ltd said on Wednesday that it has sold 50% in a unit setting up a premium Bangalore residential project to ICICI Prudential PMS Real Estate Portfolio, for 350 million rupees. ICICI Prudential PMS has invested in the project at the land acquisition stage.

Last week, D S Kulkarni sold 50 % in a unit setting up a SEZ in Pune to GTC Cyprus for $90 million. Ahead of the announcement, DS Kulkarni shares ended at 95.30 rupees, up 2.2 % in a strong Mumbai market.

Hotmail Allies With Parsvnath

The famed Nano City project of Hotmail man Sabeer Bhatia, is all set to get a partner soon and that will be realtor Parsvnath Developers. As Sabeer arrives in India on July 10, final decisions will be taken about handing over 30-38% equity stake in the project to Parsvnath Developers.
A senior official of Nanocity Developers told FE, “Since Sabeer is arriving on July 10, final discussions about the deal will be held for 2-3 days. It will be decided only by the end of this week when to announce the pact. We are mulling over handing equity stake anywhere between 30-38% and negotiations are on about giving the development rights to Parsvnath.”
Nano City, which is proposed to come up in Raipur Rani in Haryana will be spread over 11,000 acres with about 23 villages falling under its purview.
The company plans to acquire about 5,000 acres in the first phase over 1.5 years with an investment of about Rs 1,500 crore.
Officials from Parsvnath Developers confirmed that the talks are going on but the negotiations have not reached their final level. “We are discussing the commercial possibilities and then modalities will be worked out. Land acquisition will also be a part of the deal,” the official informed FE.
Nano City project had got all the approvals by September 2007 but there has been a huge delay in the land acquisition process. And now with the new partner coming in the process will have to be started again amidst high prices of real estate in the area. Nano city officials told that the master plan for the project is ready and we plan to have golf courses, educational institutions, and research development companies from across the globe, MNCs etc.

The project is expected to attract world-class companies involved in the creation of Intellectual Property. It is viewed as a future hub for the companies operating in areas such as Software Development, Nano Sciences, Next generation Drug Discovery, Bio-Technology, Energy Research and Semiconductor Research.

Mahindra Decides To Be Slow On Bengal SEZ Project

Mahindra & Mahindra (M&M) has decided to go slow on its world city project in Bengal.
The conglomerate, with interests ranging from automobile and real estate to IT, financial services and infrastructure, had planned to invest Rs 4,000 crore in Bengal over the next few years to develop the 100-acre IT special economic zone (SEZ) and township.
M&M executive director Arun Nanda had met Bengal IT minister Debesh Das, chief secretary Amit Kiran Deb and tourism minister Manab Mukherjee in December 2007.
The world cities are integrated units which are divided into business and residential zones. They require anywhere between 100 acres and over 3,000 acres.
In Bengal, M&M looked beyond Calcutta to Kalyani and Siliguri for the township project. They have seen locations at Kalyani but thereafter there has been no response from them.
M&M, also known for developing destinations such as Munnar for tourism, is scouting for similar locations in the state. The company had also expressed interest in a hospitality project at New Town, Rajarhat.
The company’s IT arm, Tech Mahindra, is building the Bantala SEZ in over 12 acres and plans to employ 2,000 people in the first phase of 18 months.
M&M has also signed a memorandum of understanding with the West Bengal Tourism Development Corporation to provide consultancy to the state government for setting up eco-friendly infrastructure in the Sunderbans.

Government will scrutinize investments from tax-haven island nations

The government is planning to scrutinise investments flowing in from tax havens such as Andora, Aruba, Bahamas, Costa Rica and Dominica where investor details remain confidential due to banking policies.

According to sources in the department of industrial policy and promotion (Dipp), the government is concerned about Indian residents parking money in the island nations to route them back for investments. There are also mounting fears of money being used for terror funding and laundering activities. Read More »

DLF Plans Rs 800 Crore Fund For Construction Push

DLF is looking at setting up a Rs 800-crore venture capital (VC) fund with a mandate to invest in companies engaged in equipment management and construction activity. This is being seen as a strategic move by DLF to support its rapidly expanding construction activity.

The Delhi-based firm has filed the documents with market regulator SEBI seeking approval for setting up the VC fund. DLF rejected to comment beyond this because the matter is under SEBI process.

The realty boom of the past three years has rapidly changed the scale at which realty firms worked in India. Companies have seen unprecedented growth and have taken up projects several times the size they had done in the past, requiring manpower, equipment and management skill on a completely new level.

DLF, India’s largest real estate firm, has been a leader in taking up bigger projects and executing them at a rapid pace. It constructed 9 million square feet of space in the last fiscal and plans to complete 16 million square feet this year.

It has set a target of 22 million square feet for the next fiscal. With such an ambitious target on mind, DLF needs a strong support infrastructure in place. The company has already been focused on strengthening its execution capabilities and significantly improves its performance.

A venture capital fund is only going to augment DLF’s effort towards quicker execution. The fund will invest in small companies which will manage equipment, construction material and manpower. The VC-funded companies may buy advanced equipment, critical for fast execution and then lease it to DLF for construction. Similarly, these companies can independently manage construction material and manpower and become a solid source of supply to DLF, whose operations have now spread across the country.

These VC-funded firms, which are likely to have long term agreements with DLF, will have the flexibility to put to use their men and material by offering them to other developers.

Cement Companies Affected Due To Real Estate Slowdown And Inflation

Higher input costs, low market valuations and scaled up capacity amidst reduced demand is likely to take its toll on the cement industry. The growth rate of the industry is projected to drop below 10 % for the current fiscal.

According to a report by Edelweiss Research, weak fundamentals and mounting cost pressures are likely to further pull down the replacement costs, even as valuations have corrected sharply in the recent past.

High inflation and home loan rates have slowed down the growth trajectory of the real estate sector, which accounts for 60 % of the total cement demand.

This slowdown is likely to hurt the cement sector the most. The surplus of cement in the industry is predicted to be as high as 20.7 million tonne in 2008-09 and 47.4 million tonne in 2009-10.

The major expansion plans announced by the companies will further add to their woes, as low market demand will significantly reduce the capacity utilization.

Setting up of new facilities will impart additional capacities of 34 million tonne and 45 million tonne respectively in 2008-09 and 2009-10. This is likely to bring down the capacity utilization in the industry down from the current 101 % to 82 %. Even as it loses power to dictate prices, increased cost of power, fuel and freight will add pressure on input costs.

Among the cement majors, valuations for ACC and Ultratech seem to have bottomed out with discounts as high as 35 % of the replacement costs.

Ambuja Cements too is trading at a higher discount than previous down cycle, suggesting bottom valuations. However, replacement valuations for Madras Cements and India Cements indicate scope for further down slide when compared to their previous down cycle valuations.

The report has suggested that speedy implementation of sixth pay commission and lower inflation and interest rates are necessary for the up cycle to begin. It has added that aggressive consolidation in the cement sector can also help them to avoid surplus production.

Binani Plans To Tie Up With Real Estate Majors

Binani Cement, the flagship company of the Rs 1,700-crore Binani group, is considering long-term bulk cement supply contract with real estate developers including Raheja and Hiranandani. The initiative, if it fructifies, will be the first in the industry and other cement companies may follow suit.

Binani Cement’s managing director Vinod Juneja confirmed the discussions between the company and a few real estate firms on this regard. “It is at a very initial stage. Yes, we had talks with some real estate developers on cement contracts”.

According to industry experts, this will be a win-win contract for both. The long-term contract will empower the real estate developers to control over vagaries of price fluctuations of the commodity. On the other hand, Binani Cement will get assured buyers of its produce.

Industry sources said that the realty sector may invite cement companies to participate in bidding before signing any such contracts. Asked on this, Mr Juneja said that his company would not hesitate in bidding, if required. Analysts attributed the main reason for the slow down in the real estate sector to tight monetary condition. Increase in cement prices, that too during the rainy season which normally sees a price drop, makes the situation further unfavourable for the developers.

Incidentally, Binani is also getting into the real estate sector this fiscal. The company has around 56 acres of land in Wada, about 30 km from Thane in Mumbai. It plans to develop the land jointly with a partner into an IT Park. Binani Cement is expanding in the northern and western parts of India in the next quarter. This expansion is a part of the company’s plan to become $1 billion firm by 2012. It operates from its fully-integrated cement plant at Binanigram in Rajasthan.

NRIs Coming Back To Indian Property Market

After having lived outside of India for close to 40 years or even more, many NRIs are now joining a reverse flow into India, and investing in property back home.
Many are looking for retirement, or semi-retirement homes that may later tempt their children or grandchildren into connections with India. But it can also be good investment.
Interest is growing among both the older NRIs, and the younger lot of professionals who have recently migrated from India. Read More »

Unity Infra Upcoming Project

Unity Infraproject has announced it’s FY08 results. Unity Infra project’s profit after tax (PAT) for FY2008 stood at Rs 600 million, up 42% from Rs 423 million in FY2007. EPS for FY2008 was Rs 44.9 versusRs 32.9 in FY2007, a growth of 36%.

Out of the current order book, 56% pertains to government and 44% to private sector. The current order book as on May 2008 is at Rs 30224.6 million.

In order to diversify across real estate and infrastructure development, the company has initiated real estate projects across 3 cities through a wholly owned subsidiary.
The real estate projects are across Pune, Nagpur and Goa all in JV with BSEL Infrastructure.

Going forward, the company expects continued rapid and profitable growth – targeting topline and bottomline growth of more than 40% over the next couple of years.
The order book in March 2009 is expected to grow by more than 50% over that of March 2008.

Company is increasingly focusing on bigger ticket projects. It recently bagged on road project worth Rs 250 crore.

UK’s Eredene Cap Picks Up 50% Stake In AILPL

UK-based Eredene Capital has picked up a 50% stake in Apeejay Infra-Logistics (AILPL), the infrastructure arm of Kolkata-based Apeejay Surrendra Group.

The group is setting up a state-of-the-art logistics park in Haldia in West Bengal’s West Midnapore district. Eredene Capital has invested Sterling Pound 5.25 million or Rs 42 crore to pick up the 50% AILPL stake. This was confirmed by Abdul Wahid, the new chief executive officer of AILPL.

Eredene Capital invests in infrastructure projects and in real estate development in India. It focuses primarily, but not exclusively, on logistics, distribution of warehouses and port services. Mr Wahid, who will be responsible for all infrastructure related activities of the Apeejay Surrendra group, has over 17 years of experience as a senior supply chain management professional.

Speaking to media, Mr Wahid said: “The Eredene group has picked up a 50% stake in APILPL at an investment of Rs 42 crore. The Eredene group has a crack team with core experience in real estate, infrastructure, ports and logistics and we see them as natural partners in the development project at Haldia. We look forward to working with them in this and other future projects as well.”

In fact, Eredene and the Apeejay Surrendra group have entered into an agreement whereby the former would be Apeejay’s exclusive partner for all infrastructure and logistics projects in nine eastern states of India.

The proposed logistics park at Haldia will be located 7 kms away from Haldia port. It will provide distribution, warehousing and transport services to industrial units located there. The park will have anicllary facilities such as commercial offices, hotels, shopping malls and light processing workshop.

The 72-acre plot for the Haldia project has already been specifically marked for industrial use by the Haldia Development Authority. The process of lease acquisition is on. The total cost for development of logistics at the park is Rs 192 crore.

Talking about funding of the project, Mr Wahid said it will be done through a mix of debt and equity. “An equity investment of sterling pound 10.5 million will be shared equally between Eredene and Apeejay Surrendra group. The balance will be funded through debt.”

“We are trying to give land to the Apeejay group as quickly as possible, so that they can start work at the site,” said PA Siddiqui, chief executive officer of Haldia Development Authority.

DLF Board Of Directors To Approve Buy-Back Of Equity Shares

India’s largest real estate company, DLF Ltd, said on 02nd july that its board of directors would meet on July 10, to consider and approve a buy-back of equity shares. The buy-back proposal comes at a time when the company has seen a sharp erosion in its share price over the past few weeks.

The announcement lifted the sentiment of the stock on 02nd July. It was ruling at all-time low of Rs 350.30 on the BSE, but ended the day with a gain of 15 % at Rs 423.95 against 01st July closing price of Rs 368.40.

DLF  promoted by billionaire Mr K.P. Singh  had debuted on the Bombay Stock Exchange (BSE) in July last year at Rs 582 per share, almost 11 % higher than the issue price of Rs 525 per share. However, the stock value has eroded since the start of 2008, after it opened the year at Rs 1,055, it reached an all-time high of Rs 1,225 (on January 15, 2008), and a low of Rs 350.30 on 02nd July.

“The shares today are at a level lower than the intrinsic value of the company. The company wants to give a signal to its shareholders and the market that it will take the necessary steps to ensure that the stock is quoting at a fair value. The company is concerned that the stock is quoting below the issue price,” a DLF official said.

However, the company has not specified the size of the proposed buyback or its price. Sources said that the company was likely to consider an open market route for the buyback.

At present, the public holding in the company is pegged at about 12 %. The company has cash of about Rs 2,000 crore on its balance sheet, sources pointed out.

The real estate sector has been at the receiving end of the bourses following the increase in interest rate and on firm inflation numbers.

According to Enam Securities, “Given the falling demand/capital values, project sales/internal accruals falling short of funding requirement, more pain is expected in the near term. It is time to tread cautiously on this sector, the report added.

“Due to rising interest rates and property prices in the last one year, there has been decline in the transaction volumes in the residential side. Prospective buyers are now waiting on the sidelines for the property prices to correct. In the wake of increasing interest rate scenario, we are increasing our discounting rate assumption for the real estate companies under our coverage,” said a recent Emkay report.

Realty Slump Affects AIM

A slump in the Indian real estate market has cast a shadow on the property funds listed on London’s Alternative Investment Market (AIM). All the five India-focused property funds floated by local developers have been under-performing in the past two months.

On an average, they registered an 18% negative return over the last two months. The market capitalization of all the Indian developers has eroded around 60-85% during the past few months and it has had its impact on the AIM market.
Unitech Corporate Parks, the AIM-listed entity of the Delhi-based real estate firm Unitech, has been the worst performer with 27% negative return; while the Mumbai-based Hiranandani group’s Hirco has suffered a 23% fall. Read More »

Real Estate Business In Kerala

Kerala, which has been recognized for its high human development but low economic growth, is now displaying a new phenomenon. Growth has picked up the pace since the late 1980s, as a result of economic improvement and a large inflow of remittances. The modern phenomenon of migration from Kerala to the Gulf countries and the increasing inflow of remittances are having a great impact on Kerala’s economy. The state planning board reports that the remittances from the Gulf to this small state are Rs. 400 crores/year. An annual inflow of this amount cannot help influence the fortune of the population.
Kerala has achieved landmarks in many businesses. Real estate business in Kerala is one of the youngest branch and made marvelous growth in current time. The state views the construction of public infrastructure as indispensable in projecting cities in Kerala as a prime investment destination and in civilizing the quality of urban life. Urban planning and management are marshaled to re-imagine and re-order these smaller cities/towns as a “global city” where the existing urban form is considered as an obstacle to be detached. The changing perceptions of urban infrastructure and planning and the rapid re-ordering of city-spaces in the era of globalization is a vital element in the increase in demand for Property in Kerala. Cochin, which is now known as Kochi is the commercial capital of Kerala and identified as the Queen of the Arabian Sea. It is a place which is blended with historical places, forts, old churches, beaches, backwaters, snake boats races, Kathakali, museums and the convenience of a big city with towering buildings, luxury homes and business centers.

Developers Are In Search Of New Attraction Points

Developers are offering Swedish massage, a vigorous Kerala head rub, a good old steam bath and many more at picture perfect destinations that are a good trek away from cities.
After making luxury villas and apartments in the heart of town, property firms are now wooing people to exotic spas and resorts.

From luxury to leisure, real estate companies such as Brigade group, Omaxe Ltd, Prestige group, Sobha Developers Ltd and Value Design build Pvt. Ltd, are entering into the leisure segment to build health resorts and spas in the backwaters of Kerala or amid the plantations of Chikmagalur in Karnataka.
Mr. Vineet Varma, chief executive officer, Brigade Hospitality Services Pvt. Ltd said, “The huge demand and scope of business in the leisure and hospitality segment are the major drivers for builders like us to get into this vertical,” Brigade Hospitality Services Pvt. Ltd is a fully owned subsidiary of Bangalore-based Brigade group. “Also, there’s only so much you can do in the residential and commercial sectors and new verticals like these complete our portfolio.”
Brigade group is coming up with a Rs100 crore premium health spa resort in the quiet coffee plantations of Chikmagalur, about a four-hour drive from Bangalore.
While the group will develop the property, it has teamed up with Singapore-based hospitality brands Banyan Tree and Angsana to operate it.
The leisure segment has attracted not just top-of-the-line developers but also new entrants.
Value Designbuild, a five-year-old real estate company based in Bangalore, is also set to develop a spa along with leisure homes.
Another Bangalore company, Sobha Developers Ltd, has a full-fledged Ayurvedic spa offering the traditional Kerala Ayurvedic massages, herbal baths in its first integrated township Sobha City in Thrissur in Kerala.
“Tier II or smaller cities offer a lot of variety for real estate development and we want to capitalize on the growing demands for our consumers. With the middle class getting richer, it is imperative to give them choices with projects like these,” says J.C. Sharma, executive director of Sobha Developers.

Five Million Tonnes Steel Plant In West Bengal

KOLKATA: JaiBalaji Steel, which is investing Rs. 16,000 crore to set up a five million tonnes steel plant in West Bengal, is set to begin construction by this year on its project located in Raghunathpur in Purulia, which is one of the backward districts in the country.
Addressing a press conference here, Aditya Jajodia, Chairman and Managing Director, said that in the first phase Rs. 5,000 crore would be invested to set up a two million tonne steel plant along with a one million tonne cement unit and a 400 MW power plant.
About 600 acres had already been acquired for the project, which needs a total of 3,800 acres of which 1,500 acres would be required in the first phase.
West Bengal Industrial Development Agency had already identified 1,200 acres. Company sources said that construction work may begin by the end of this year when physical possession of land was expected.
Regarding financial tie-up for this project, Mr. Jajodia said that for the first phase, there would be an equity component of Rs. 1,500 crore and a debt component of Rs. 3,500 crore. Besides steel, the plant would have a capacity for making three million tonnes of cement while generating 1,215 MW of power.
Mr. Jajodia said that the company clocked a turnover of Rs. 1,347 crore in 2007-08 against Rs. 1,073 crore the year before. The net profit shot up by 91 % to touch Rs. 118.80 core riding on the back of increased efficiencies and improved steel prices.