The Kolkata-based Electrosteel group may rope in fresh investors in Electrosteel Steels Ltd (ESL), according to market sources.

This is to bridge the finance gap in ESL’s upcoming 2.2-million-tonne integrated steel plant at Bokaro in Jharkhand. The estimated Rs 9,562-crore greenfield project is facing cost overruns after over a year’s delay in commissioning.

Sources told Business Line that ESL was busy exploring options to raise nearly $250 million (approximately Rs 1,300 crore) in the overseas market.

The promoter group currently holds 39.64 per cent interest in ESL. Institutions, both foreign and domestic, hold an aggregate of 1.81 of equity stake in the company.

Chinese interest

Responding to Electrosteel’s call, a Chinese steel-maker has recently shown initial interest in picking up stake in the steel project. ESL is built using Chinese technology. The plant and machinery is supplied by China First Metallurgical Construction Corporation Ltd.

When contacted, a group official neither confirmed the Chinese interest nor the quantum of finances to be raised.

“If there is an offer for equity investment in ESL, we will consider it seriously,” the official said, indicating that the group was open to roping in a new investor for the project.

Coking coal

Meanwhile, Electrosteel has started producing prime coking coal from the underground captive mine at Parbatpur in Jharia, which is linked to the steel-making project.

While the current production is estimated to be approximately 1.5 lakh tonnes a year, the company hopes to reach the peak capacity of one million tonnes in the next 18 months.

The block has an estimated reserve of 231 million tonnes prime coking coal, available in limited quantities in the country.

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