Calcutta, Aug. 2: City-based Jai Balaji Sponge is planning to merge group company Shri Ramrupai Balaji Steels with itself.

The Jai Balaji board will meet on August 11 to consider the move and appoint consultants and valuers to arrive at the merger ratio.

Jai Balaji is a leading player in the sponge iron business in the east, while Ramrupai manufactures TMT bars.

The group, owned by the Jajodia family, is now planning to expand the steel-making facility in Bengal at an investment of Rs 2,500 crore.

By merging the duo, the management is hopeful of creating a strong balance sheet size to execute such a large project.

Jai Balaji, the elder of the two, had a turnover of Rs 432.7 crore in 2005-06, while Ramrupai, which went public last fiscal, clocked a turnover of Rs 448.4 crore in the same period.

Jai Balaji has an over 1-million-tonne sponge iron making facility at Ranigunj. The company will set up a sinter plant, a steel melting shop and a blast furnace at a cost of Rs 500 crore.

Ramrupai also has a 0.12-million-tonne sponge iron unit, a pig iron unit, a steel melting shop and a rolling mill. The company is setting up a ferro alloy plant.

Chairman and managing director Aditya Jajodia said the group was aiming at a steel making capacity of 0.8 million tonne (mt) by the end of 2006-07. It will go up to 2 mt in the next three years.

The group will produce about 0.8 mt speciality steel that could attract ancillary industries to set up shop here. The rest will be regular hot rolled coil.

Jai Balaji stock closed at Rs 40, while Ramrupai ended at Rs 12.65 on the NSE today.

Carbon credit

Jai Balaji has become the first company from Bengal to be eligible for trading in carbon credit.

The company has received the necessary approval from the United Nations.

The international body sanctioned Jai Balaji’s waste heat recovery based captive power plant on July 17, 2004.