Electrosteel to make steel, plans to invest in Rs 4,900-crore Jharkhand plant

KOLKATA: Electrosteel Castings (ECL), the country’s largest manufacturer and exporter of ductile iron pipes, is venturing into steel-making. The company has just floated a special purpose vehicle (SPV) —Electrosteel Integrated — to set up a 1.3 million tonne integrated steel plant in Jharkhand. The total outlay on the proposed venture is estimated at Rs 4,900 crore.

Of the total project cost, Electrosteel Castings intends to infuse about Rs 500 crore as equity into the SPV. The investment will be taken up in a phased manner over a period of 30 months. “An SPV has been floated to undertake the new steel project in Jharkhand. The total cost involved in it would be around Rs 4,900 crore,” Umang Kejriwal, managing director, ECL, told ET.

The plant will produce long products like structurals, bars and rods. This backward integration initiative is expected to reduce ECL’s operating costs. A senior company source said that Electrosteel Castings will have a “significant” stake in the SPV. “The balance equity will, in all likelihood be taken up by a consortium of banks,” the source added.