Calcutta, March 11: SPS Steel and Power is in talks with private equity firms to offload 10 per cent stake in the company.

It hopes to raise Rs 250 crore through the private equity deal, which is expected to be completed by next month.

The company, however, has decided to defer the plan of an initial public offering for a year.

Bipin Vohra, chairman and managing director of SPS Steel, said the company was undertaking a Rs 2,500-crore expansion plan in steel and power.

“We plan to launch the IPO, which may raise Rs 500-600 crore, in April 2009,” he said.

However, the company’s expansion plans will depend on the behaviour of the steel market, which Vohra called “unrealistic”.

He said margins were under pressure even as product prices had gone through the roof.

“We have hiked TMT bar prices thrice this year, but are not making much money. Working capital requirement has gone up as well,” he said.

Vohra criticised the central and the Bengal governments’ slack policies in iron ore mine allocation.

Prices of iron ore, coking coal and ferro manganese have risen internationally. Companies such as SPS, which do not have captive raw material, have been affected by the hike in prices. SPS, which sells TMT bars under the Elegant brand, has recently signed a deal with an Indonesian company to procure coal from there.