VBC Ferro Alloys Limited (VBCFAL), a VBC group company, was promoted by a group of technocrats & entrepreneurs led by Dr M V V S Murthi and Shri J S Krishna Murthy. The company was incorporated under the Companies Act, 1956 on October3, 1981.

The company is engaged in the production of HC Ferro Chrome, HC Silico Manganese, HC Ferro Manganese and Ferro Silicon.

Initially VBCFAL set up a plant for production of 10,000 TPA of Ferro Silicon at Rudraram Villate, Medak District of Andhra Pradesh at a cost of Rs.5.92 crores. This unit went into commercial production in April, 1985. The Unit has several locational advantages. It is close to 132 KVA power line of AP Transco, adequate water supply is available from Manjeera Reservoir and underground source, the raw material required are available within a radium of 200/250 KM.  

In September, 1989, VBCFAL formulated an expansion scheme to increase to capacity of Ferro Silicon from 10,000 TPA to 15,000 TPA and further installed the second furnace in 1992 for production of Ferro Chrome with a production capacity of 22,000 TPA. Initially, the company was incorporated with an authorized capital of Rs.1.50 crore. Further capital was raised by a public issue of Rs.80 lakh during 1984. Subsequently, in the year 1990 fully convertible and partly convertible debentures were issued to meet the cost of expansion. The present authorized capital of the company is Rs.20.00 crore and paid up capital is Rs.4.04 crore. 

The company had performed well in the initial years and consistently paid dividend from 1985 – 86 up to 1990 – 91 in the range of 20% - 30%. In the year 1991 – 92 because of recession in the steel industry, hike in power tariff, un – remunerative prices and availability of imported Ferro Silicon at prices not comparable to domestic prices, the company incurred cash loss of Rs.4.91 crore and defaulted in payment of institutional dues. Severe power cuts and intermittent shutdown of plant caused damage to the furnace lining, which not only reduced the level of production but also increased the power consumption.  

With the deterioration in working of VBCFAL, re-alignment amongst the promoters started taking place which led to stepping down of founder Managing Director – Shri J S Krishna Murthy in December, 1992 in favour of Shri A Sudhakar who also resigned within a short period. Then Shri M S Rama Rao, S/o. Dr. M V V S Murthi took charge as Managing Director and was putting efforts to renovate and restart the company. In the financial year 1993 – 94, the company posted heavy losses. As at 31.03.1994, the accumulated losses and the intangibles amounted to Rs.20.04 crore against paid up capital reserves of Rs.13.09 crore. The company was registered with Board for Industrial and Financial Reconstruction (BIFR) as a sick company under the provisions of Section 3 (1) (o) of Sick Industrial Companies (Special Provisions) Act, 1985.  

During this worst hit period, the company had self introspected and tried to find the reasons for sickness. The major reason the company found was the insufficient & irregular supply of power. To over come this problem, the company has contemplated taking up a Power Project by promoting Konaseema EPS Oakwell Power Limited (KEOPL), a special purpose company incorporated to build, own and operate the natural gas based combined cycle power plant with a capacity of 445 MW to be set up in the State of Andhra Pradesh and  M S Rama Rao stepped down from the position of Managing Director to concentrate on the power project and his brother Shri M S Lakshman Rao took charge as Managing Director with effect from 30th October, 2000.   Furthering the developments, Shri M S Lakshman Rao could successfully bring the company back into financial soundness and also got the company discharged from the purview of BIFR in September, 2001. The company performed well during the years 2002 – 03, 2003 – 04 & 2004 – 05 and paid a dividend of 10%, 10% & 20% respectively. 

The other group companies:

• KEOPL-Konaseema Energy and Oakwell Power Limited
• OPCL -Orissa Power Consortium Limited.
• BAEL -Bharat Alloys & Energy Limited.
• VBC FLL -  VBC Finance and Leasing Limited