Natural resources major Vedanta has abandoned its plan of setting up a greenfield integrated steel plant in Jharkhand, a senior company executive said on Tuesday, as bagging stressed steel company Electrosteel Steels in the state will fulfill its strategic needs.

“We have completed the acquisition of Electrosteel in Jharkhand which is a good strategic fit to create an integrated iron ore and steel business,” chief executive Kuldip Kaura told ET over the phone on Tuesday.

“Since this plant is in Jharkhand, it fulfils our strategic need (of adding value to the iron ore business),” Kaura said, when asked whether the company will go ahead with its earlier plan of setting up a 1-MT green-field integrated steel plant in Jharkhand.

The Anil Agarwal-led company had signed a memorandum of understanding with the state government of Jharkhand last year to build an integrated steel plant in the state that would have employed nearly 5,000 people, according to information on the company’s web site.

However, with Electrosteel falling into the company’s kitty, Vedanta will not be going ahead with this plan. Bought at an offer of ?5,320 crore, Vedanta plans to raise its capacity to 1.5 MT in the near term and to 2.5 MT going forward, Kaura said.

Clocks 2% Rise In Q1 Net
Vedanta announced its earnings for the first quarter of the current fiscal on Tuesday. It reported a 2% increase in net profit at ?1,533 crore, missing Bloomberg estimates of ?2,374 crore.

Operationally, however, Vedanta showed a marked improvement, with EBITDA rising 33% at ?6,529 crore over the last year.

Revenue from operations showed an increase of 15% at ?22,206 crore on the back of higher volumes at aluminium, oil & gas business and higher availability at the Talwandi Sabo power plant.

The company’s net debt at the end of the June quarter stood at ?29,910 crore, higher than the last quarter on account of the acquisition of Electrosteel and adjustment of working capital with borrowings. It has cash and liquid investments of ?35,251 crore. Its net debt to EBITDA ratio stands at 1.1x.

 

Source: economictimes.indiatimes.com

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