Sangam Group plans to foray into steel business through a new subsidiary Mahalaxmi TMT Private Limited and will set up an integrated steel plant near Wardha in Maharashtra. The plant, to be constructed in two phases, will involve a capital expenditure of Rs 697.50 crore.
The company will set up manufacturing capacity of 2.40 lakh tonnes per annum for mild steel billets in first phase which will be completed by May 2011. Later the company plans to ramp it up to 3.36 lakh tonnes by May 2012 (second phase). It would also set up 5 lakh tonnes per annum capacity for manufacturing TMT bars, angles and channels capacity along with 40 MW captive power plant in the second phase.
Entire project would be funded by an equity contribution of Rs 217.50 crore from the promoters, who hold 77.5 per cent stake in the new subsidiary. On the other hand, the remaining Rs 480 crore will be managed through debt.
