Jai Balaji Group CMD Ajay Jajodia (left) and Anand Rathi Securities chairman Anand Rathi in Calcutta on Thursday. A Telegraph picture

Calcutta, July 8: Jai Balaji Group will tap the capital market with an initial public offering (IPO) of group company Shri Ramrupai Balaji Steels Ltd (SRBSL).

The IPO will raise Rs 40-44 crore to part finance an integrated steel plant in Durgapur. SRBSL has already commissioned part of the project comprising a sponge iron, pig iron and rolling mill.

It will set up a steel melting shop with billets caster, a coal washery and a captive power plant.

The total cost of the project is Rs 285 crore, which will be financed by banks and internal accruals.

The power plant will use the waste heat recovery method to produce power at less than Re 1 per unit.

The coal washery unit not only provides good quality coal for sponge iron but the waste will also be utilised in the power plant.

“We have decided to go for an integrated project to protect ourselves in case of a downturn,” Jai Balaji Group chairman and managing director Aditya Jajodia said.

He said the price band for the issue has been fixed at Rs 20 to Rs 22. The issue will open on July 9 and close on July 14. The shares are proposed to be listed on the Bombay Stock Exchange and National Stock Exchange.

The company has started marketing TMT bars under the brand name Balaji Shakti.

Jai Balaji Sponge is the first to be listed on NSE through the IPO route in the latter half of 2003.

The group has a sponge iron capacity of 3,45,000 tonnes.

Jajodia allayed fears on raw material security saying that long-term contracts are in place with suppliers.