RINL chairman Y. S. S. Rao in Calcutta on Monday. A Telegraph picture

Calcutta, April 26: Rastriya Ispat Nigam Ltd (RINL), which runs the Vizag Steel Plant, has chalked out a Rs 8,250-crore plan to step up its capacity to 7 million tonnes (MT) by 2007-08 from 4 MT at present.

The company has submitted a project report to the Centre for approval. Chairman and managing director Y. Siva Sagar Rao said it was at an advance stage of clearance and the final nod could come within two months.

To finance the project, the company was exploring the possibility of tapping the capital market through an IPO, he added.

Even as most of the fund required would be generated through internal accrual, the company could need to mobile about Rs 2,500 crore from outside.

Rao said raising resources would not be a problem since the company was expecting to wipe out its accumulated loss by this fiscal.

?We hope to wipe out the entire accumulated loss of about Rs 1,000 crore in four to five months,? Rao said.

RINL is likely to post a profit of about Rs 1,900 crore to Rs 2,000 crore during 2004-05.

With steep raw material prices prevailing globally, the company has chalked out a plan for raw material security.

Rao said RINL was trying to form a joint venture with NMDC at Bailadila 11-a and 11-b. However, the proposal was still at a fluid stage.

The company had also applied for four iron ore blocks in Orissa and one at Rowghat in Chhattisgarh. At present, RINL will continue to source iron ore from NMDC.

?Despite the good performance in 2004-05, when RINL recorded a sales turnover of Rs 8,181 crore, the current financial year is going to be a challenging one because of a steep hike in the prices of raw materials,? he said.

Regarding a possible price hike to offset the rise in coal prices, he said the company would absorb part of it. He ruled out the possibility of any immediate price hike.

The prices of imported coking coal surged to $127 per tonne against $60 per tonne last year.