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Citigroup arm to buy 2.8% in Jindal Iron

Mumbai, June 27: Jindal Iron & Steel Company (Jisco) is planning to issue 12.25 lakh equity shares in a preferential allotment to CVC International, a unit of Citigroup Global Investments. The allotment will constitute 2.78 per cent of the company’s equity capital.

Jisco today informed bourses that its board would meet on July 4 to consider the preferential allotment. However, the firm did not divulge the price, saying it will be determined in line with Sebi guidelines. Officials were not available for details on how the proceeds from the allotment will be utilised. Citicorp Banking Corporation will be the investment vehicle.

The report perked up the Jisco share, which closed at Rs 126.35 on the Bombay Stock Exchange (BSE) after opening at Rs 124.05 and hitting an intra-day high at Rs 128.25.

Jisco, part of the $ 1.5-billion Jindal group, is a maker of flat steel products, and a market leader in galvanised steel. It exports to a host of nations, including China, Italy, Germany, UK, France, US and Canada.

In the recent past, the company has, like many others in the industry, tried to build its own image and identity with branded items like Jindal Vishwas in domestic market and Jindal Galvplus in foreign countries.

The company reported a fourth-quarter (of 2002-03) net profit of Rs 88 crore, a sequential increase of 80 per cent. Full-year turnover was up 45 per cent at Rs 1,612.26 crore compared with Rs 1,114.10 crore in the previous year. Exports were pegged at 78 per cent of the total sales, an increase from 58 per cent in the previous year.

Jisco attributed the performance to a successful capitalisation of the export potential, which yielded not only improved realisations but also increased volumes. Costs were kept in leash by a restructuring of its debts, which helped bring down the interest costs. In GP/GC segment the sales in 2002-03 were 4.93 lakh tonnes compared with 4.59 lakh tonnes in the previous year. The focus is on value-added thinner gauges.

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