JSW Steel is seriously looking at a qualified institutional placement (QIP) to raise money for its upcoming projects.
“The steelmaker is looking to raise $300-500 million via QIP issue before the end of the March 31, 2010 deadline,” a source said.
The money raised will go into the company’s proposed 10 million tonne steel plant in West Bengal, which has an investment outlay of Rs 35,000 crore, sources said.
The debt-equity ratio for the project is 3:1 and the debt has been tied up, JSW Steel has said. A part of equity the company needs to infuse will come from the QIP issue.
Sajjan Jindal, vice chairman and managing director, JSW Steel, had said a few days back that construction of the Bengal project will begin in the next six months.
Sources said the steelmaker organised a roadshow in Bellary last week and hinted at raising at least half of the pre-approved money.
An email sent to the company on February 16 remained unanswered.
JSW Steel had in July last year got the shareholders’ approval to raise $1 billion through the QIP route. The company wanted to repay the high debt on its books with this money.
As on December 31, JSW Steel had a debt pile of Rs 14,000 crore on a consolidated basis. However, Seshagiri Rao, joint managing director and group CFO, JSW Steel had earlier ruled out a QIP saying the company had already refinanced its loans and did not need to raise money.
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