Aditya Jajodia in Calcutta on Monday. Picture by Kishor Roy Chowdhury

Calcutta, Oct. 26: The Jai Balaji group will not make steel in the first phase at its proposed integrated plant at Raghunathpur in Purulia district. Instead, the company will begin with coal mining and sponge iron production, which are intermediates in the steel chain.

Jai Balaji’s investment would now be Rs 2,700 crore against the initially envisaged Rs 10,000 crore.

The company had originally proposed to set up a 2-million-tonne (mt) steel plant in the first phase. It now plans to take small steps at a time.

“We must get the ball rolling. If the company aims big and waits for everything to fall in place, nothing will happen,” Aditya Jajodia, chairman and managing director of the Jai Balaji group, said.

While several companies have signed pacts with the Bengal government promising huge investments in steel and power, Jai Balaji is the closest to implementation.

Jajodia said he expected financial closure of the first phase in six months and production to start in two years. A 1,100-acre plot — enough initially — and coal mine allocation have helped the company.

The Jindals, too, have the necessary land and mines for the Salboni plant but are going slow because of a funds crunch.

Jajodia said he wanted to follow the Durgapur project model in which the company had started work on a one-million-tonne integrated steel plant with intermediates such as sponge iron and pig iron.

“We will use the cash flow from Durgapur to build the first phase in Purulia and then use the cash flow from Purulia for forward and backward integration,” he said.

The company raised Rs 198.5 crore through a qualified institutional placement with overseas funds Halbis, GMO, New Vernon and Indian entity Reliance AMC.