Adhunik Metaliks chairman G.D. Agarwal (left) with managing director Manoj Agarwal in Calcutta on Saturday. Picture by Kishor Roy Chowdhury

Calcutta, March 11: City-based Adhunik Metaliks Ltd (AML) has chalked out an expansion plan entailing Rs 437 crore investment to turn itself into a fully integrated specialised steel manufacturer. The company is coming out with a Rs 100-crore maiden flotation of shares to finance the project located in Rourkela.

It has fixed the price band at Rs 37-42 for the initial public offering. The company is enhancing its steel making capacity to 430,000 tonnes from the present level of 250,000 tonnes.

While 65 per cent of the product will be auto grade carbon and alloy steel, the rest will be stainless steel.

Elaborating on the project, Manoj K. Agarwal, managing director of Adhunik Metaliks, said it planned to set up a steel melting shop, rolling mill, a ferro alloy division, and a power plant, besides investing in coal and iron mines development.

?We will focus on the niche area of alloy and stainless steel production,? Agarwal added.

The first phase of the expansion programme, involving an investment of Rs 250 crore, is already on stream.

The second phase will be completed by March 2007. While Rs 100 crore will come through the IPO, the company will raise another Rs 284 crore from banks and financial institutions as loan. The remaining Rs 53 crore will come from internal accruals.

Going forward, Adhunik Metaliks aims to bring its production cost down by gaining control over the supply of raw materials.

The Adhunik Group has obtained provisional allotment of coal block at Talcher in Orissa from the coal ministry.

The iron ore mine will start production in 6-9 months, while coal production from the captive mine may take another 24 months. According to Agarwal, the iron ore is of high quality having elementary iron content of 65 per cent.

With the second phase expansion in place, Adhunik Metalik?s turnover is expected to go up to over Rs 1,000 crore. In the first nine month of this fiscal, the company clocked a turnover of Rs 259 crore and an after tax profit of Rs 17 crore.