1. business and industrial
2. energy
3. coal

We d n e s d ay 1 8 , M a rc h 2015
News &
Report Analysis
Currency Market
Precious Metal
Base Metal
Energy Market
 Goa mining to resume soon as MoEF
revokes suspension of green nod
 Centre re-examining bids for 9 auctioned
coal blocks: Anil Swarup
 Panels on mining and coal bills adopt
reports on them
 Gold imports for Apr-Dec period
stands at $26 bn
 Mukand to transfer alloy steel business to
its subsidiary for Rs 1,590 cr
2
Wednesday 18, March 2015
Daily
MMR Landed Prices
London Metal Exchange : Tuesday 17, March 2015
Pr. Sell
(1)
Morning Session
Buy
Sell * (2)
Afternoon Session
Buy
Sell
Kerb
Change
(2) - (1)
Value
Stk(tns)
change
$/ton
Rs/ton
Copper Grade A
Spot
5853.00
5764.50
5765.00
5777.00
5777.50
5805.00
-88.0
3,42,200 MMR LP
3,92,374
3-mth
5835.00
5745.00
5746.00
5759.00
5760.00
5785.00
-89.0
4625 14-D MA
3,55,867
PP (HCL)
3,88,044
Average
10-days - 5807.80
20-days - 5796.90
30-days - 5754.70
Tin High Grade
Spot
17350.00
17355.00
17360.00
17264.00
17265.00
17321.00
10.0
10,280
--
--
3-mth
17400.00
17400.00
17450.00
17300.00
17300.00
17350.00
50.0
-30
--
--
--
--
Average
10-days - 17703
20-days - 17845
30-days - 18012.30
--
Lead
Spot
1757.00
1723.00
1724.00
1721.00
1722.00
1715.00
-33.0
2,25,825 MMR LP
1,22,221
3-mth
1764.00
1726.00
1728.00
1728.00
1729.00
1723.00
-36.0
-1800 14-D MA
1,13,716
PP (HZL)
1,37,000
Average
10-days - 1785.60
20-days - 1770.80
30-days - 1790.80
Zinc Special High Grade
Spot
2001.00
1984.00
1985.00
1992.00
1993.50
2001.75
-16.0
5,33,650 MMR LP
1,44,794
3-mth
2013.00
2004.50
2005.00
2006.00
2007.00
2015.50
-8.0
-2925 14-D MA
1,31,029
PP (HZL)
1,53,500
Average
10-days - 2003
20-days - 2028.80
30-days - 2063.20
Aluminium
Spot
1761.00
1769.50
1700.00
1775.00
1776.00
1788.50
-61.0
39,42,800 MMR LP
1,41,816
3-mth
1766.00
1767.50
1768.00
1776.00
1777.00
1786.00
2.0
35425 14-D MA
1,26,900
Average
10-days - 1764.10
20-days - 1777.90
30-days - 1797.20
PP (Nalco)
1,46,900
Aluminium Alloy
Spot
1720.00
1730.00
1740.00
NA
NA
NA
20.0
26,960
3-mth
1745.00
1755.00
1765.00
NA
NA
NA
20.0
460
Average
10-days - 1784.50
20-days - 1794.50
30-days - 1796.70
Nickel
Spot
13805.00
13555.00
13560.00
13649.00
13650.00
13677.50
-245.0
4,32,120
--
--
3-mth
13945.00
13595.00
13600.00
13700.00
13700.00
13725.00
-345.0
3210
--
--
--
-01-Mar
11-Mar
Average
10-days - 13947.50
20-days - 13994
30-days - 14240.80
Note: 1. MMR LP = MMR Landed Prices, excluding excise duty. 2. PP = Producer Prices ex-smelter, excl. excise
Copper
Aluminium
Minor Metals ($/LB)
Antimony
99.65%
9,100
Cadmium
99.80%
90.00
Cobalt HG Moly.oxide
99.80%
14.00
9.00
Tantalite
30% Ta2O5
81.00
Titanium Ferro-vana
Con. Ti02
550.00
24.90
Silicon Zinc
Lead
2,050
16-Mar
16-Mar
Week ended Avg of Steel Prices: 13/03/2015 (Incl. Excise duty)
Sponge Iron
Pig Iron
Ferro Alloys :
Mandi
26,100 HMS
31,400 CRP(LSLP)
Mumbai Mkt rates in kgs :
Mumbai
Kolkata
28,800
29,400
30,800
Ferro Moly 990
Delhi
Chennai
Bhiwandi
29,400
27,500
MS Ingots
39,300
28,900
Ferro Silicon 83
Titanium
172
Indicative Domestic Market Rates (Rs./kg)
Mumbai
17-Mar
Prev
Virgin Metals
Copper Pat
Copper W/Bar
Delhi
17-Mar
Comex Copper (cents/lb)
Chennai
Prev
17-Mar
Prev
Mar'15
- Apr'15
416.0
- May'15
-
-458.0
-461.0
413.0
-
Alum Ingot
Zinc Slab
Lead Ingot
Tin Slab
Nickel (4x4)
Scrap
Copper Heavy
Copper Uten.
158.0
168.0
132.0
1,360.0
1,020.0
158.0
168.0
132.0
1,365.0
1,030.0
158.0
179.0
130.0
1,355.0
1,020.0
158.0
179.0
130.0
1,355.0
1,030.0
434.0
408.0
435.0
410.0
---
---
154.0
-
Copper Mixed
Brass Utensil
Brass Huny
Brass Sheet
Alum Utensil
-316.0
315.0
325.0
127.0
-317.0
313.0
327.0
127.0
398.0
--138.0
401.0
--138.0
-
154.0
-
Metal
Gold Std
Silver
Gold
Silver
Gold
Silver
Rate
264.15
263.35
263.30
Change
-1.3
-1.3
-1.3
Kanpur
38,900
Durgapur
35,300
Comex Al (cents/lb)
Rate
-
Change
-
Precious Metals : Indicative Rates
Market
Mumbai
Mumbai
London
London
Comex
Comex
Unit
Rs./10g
Rs./kg
$/tr.oz.
$/tr.oz.
$/tr.oz.
$/tr.oz.
17-Mar
26,050
36,000
1,150.8
15.56
1,148.3
15.56
Prev
26,250
36,500
1,150.8
15.58
1,153.3
15.60
Forex: Mar 17, 2015 (Rs/Unit Currency)
- Buy
- Sell
- Buy
USD
62.78
62.69
EURO
66.54
GBP
92.64
92.53
SGD
45.18
----AUD
47.98
YEN
0.5179
0.5170
SFR
62.62
Sell
66.46
45.10
47.93
62.51
Customs Notified Rates: Mar 06, 2015 [Rs.(Imp/Exp)]: US$ 62.30/61.80;Pound Sterling 98.10/93.95;Euro 69.10/93.95
Daily
3
Wednesday 18, March 2015
US equity market opened with negative
weigh whether the U.S. recovery can hold up
terrain on Tuesday and finally it ended with
against collapsing oil prices and a soaring dollar.
a flat note in ahead of the two day FOMC
The U.S. central bank's latest policy meeting will
meet. The indices were under pressure on FED
likely discard a pledge to remain "patient" before
nervousness. The Dow Jones industrial average
hiking rates, trimming one of the final verbal cues
fell 128.34 points, to 17,849.08, the S&P 500
it has used through crisis, recession and recovery
lost 6.91 points, to 2,074.28 and the Nasdaq
to describe its intent to keep rates near zero for a
Composite added 7.93 points, to 4,937.44.
period of time.
Asian stocks opened with mix sentiment
Among the global macro updates, the
on Wednesday as markets waiting for the U.S.
Bank of Japan maintained its massive stimulus
Federal Reserve's policy statement regarding
programme on Tuesday and signaled its
interest rates announcement. Fed officials will
conviction that a steady economic recovery will
assess the economy and debate the timing of
help achieve its ambitious price target without
the first U.S. interest-rate increase since 2006.
immediate, additional monetary easing.
Currency Market
The U.S. dollar index saw another corrective
pullback Tuesday after hitting a 12-year high
last week. A dollar that has soared more than 20
percent against major currencies over the past
year also means imported goods are cheaper,
while U.S. exports may be nicked, dragging down
growth. The pullback in the greenback is tied to
position evening ahead of the FOMC meeting
results on Wednesday afternoon. Meantime, the
Janet Yellen, US Federal Reserve
The prospect of the Fed hiking rates in the
Euro currency is firmer on more short-covering
after hitting a 12-year low Monday.
summer and drawing liquidity away from the
rest of the world has caused the dollar's peers
62.71
62.73
and South Korea's Kospi also gained.
The Federal Reserve on Wednesday is
expected to lay the groundwork for its first interest
rate hike in nearly a decade, as it continues to
USD/INR Overnight VAR
Data releases today
17:00
16:00
since May 2008, while Hong Kong's Hang Seng
15:00
62.79
14:00
Shanghai Composite Index reached its highest
9:00
62.77
13:00
62.75
monetary stimulus, added to gains. The
12:00
multi-year highs reached on hopes of more
62.69
11:00
market equities. Chinese shares, sitting atop
10:00
to tumble and triggered tumult in emerging
USD/INR - 17/03/15
62.67
0.3522
Forecast
Previous
EUR Trade Balance
21.1B
23.3B
USD Crude Oil Inventories
4.0M
4.5M
Source : Mecklai Financial
Daily
6 mth
LIBOR
4
Wednesday 18, March 2015
Major
Currencies
Today’s
Crosses
Spot
Cash
v/s INR
0.40
USD / INR
-
ATM Options (put/call)
0.15
Forward Rates v/s INR (Export/ Import)
March
April
May
August
November
February
62.70/ 71
62.67/ 68
62.86/ 89
63.32/ 34
63.69/ 71
64.87/ 90
66.00/ 03
67.04/ 07
-
-
-
0.57/0.58
0.75/0.76
0.92/0.93
1.30/1.35
1.59/1.69
1.83/2.00
EUR / USD
1.0607
66.51/ 51
66.48/ 48
66.68/ 71
67.19/ 22
67.61/ 64
68.98/ 00
70.33/ 34
71.59/ 60
0.14
USD / JPY(100)
121.33
51.67/ 68
51.65/ 66
51.82/ 84
52.21/ 24
52.54/ 56
53.60/ 62
54.64/ 67
55.62/ 65
0.68
GBP / USD
1.4761
92.55/ 57
92.51/ 53
92.79/ 83
93.45/ 50
93.96/ 00
95.67/ 70
97.33/ 36
98.89/ 92
-0.71
USD / CHF
1.0054
62.35/ 36
62.32/ 33
62.52/ 55
63.02/ 04
63.51/ 53
64.97/ 98
66.38/ 44
67.76/ 68
3.06
AUD / USD
0.7624
47.80/ 81
47.78/ 79
47.89/ 91
48.15/ 17
48.34/ 36
49.00/ 01
49.64/ 65
50.28/ 29
Source : Mecklai Financial
"The stronger dollar is not going to be a
decisive factor in the Fed's thinking," Capital
Market Highlights - Gold (% change)
Gold
Unit
Last
Economics chief global economist Julian Jessup
wrote last week. "The U.S. recovery is robust
enough to weather a firmer currency."
The dollar index, which advanced to a 12year high above the 100.00 threshold over the
Gold (Spot)
Gold
(Spot -Mumbai)
Comex Gold
MCX Gold
(Apr’15)
Prev.
day
as on March 17, 2015
WoW MoM
YoY
$/oz
1148.6
-0.46
-0.5
-6.7 -16.9
Rs/10
gms
25625.0
-0.49
-1.0
-5.8 -14.0
$/oz
1148.7
0.03
-0.2
-4.8 -16.3
Rs /10
gms
25617.0
-0.64
-0.3
-4.1 -16.3
Source: Angel Broking
past week thanks largely in part to the euro
tumbling on the ECB's quantitative easing
Comex gold was last down $6.30 at $1,146.90 an
scheme. The dollar was flat at 121.35 yen JPY=,
ounce.
having been confined to a narrow range after
May Comex silver was last down $0.72 at
touching an eight-year peak of 122.04 last week.
$15.545 an ounce. Gold and copper were little
The dollar was flat at 121.35 yen JPY=, having
changed, bracing for the Fed's statement and its
been confined to a narrow range after touching
potential effect on the dollar.
an eight-year peak of 122.04 last week.
Spot Gold was up 0.2 percent at $1,151.10 an
USDINR opened at 62.68 levels, flat against
ounce and three-month copper on the London
its previous close of 62.70 levels. The pair is
Metal Exchange CMCU3 edged 0.3 percent
expected to remain in a range of 62.50-62.85
higher to $5,737 per ton. Spot silver prices
levels. IMF chief Christian Lagarde warns India
declined by 0.6 percent on Tuesday to close at
to be prepared if US hikes the interest rate as it
$15.5/oz. The fall is in tandem with declining
could make global markets unstable.
gold prices. Weakness in Nickel prices stronger
Precious Metal
dollar exerted downside pressure on prices.
Gold yesterday made a low of $1142 per
Base Metal
ounce marking a four month low ahead of FOMC
Base metal prices ended with mixed to
meet. Gold prices ended the U.S. day session
negative note as the housing data from US failed
moderately lower on Tuesday after hitting a
to attain the expected levels for the month of Feb,
four-month low in mid-morning dealings. April
probably due to the harsh weather conditions.
Daily
5
Wednesday 18, March 2015
Besides, steady dollar, which was earlier trading
On the fundamental note, the LME monitored
at the peaks of 100 marks, weighing upon the
inventories continue to rise at a stupendous rate
base metals sector.
along with the fall in the cancelled warrants,
Copper continued to trail along the bearish
however to its contrast the metal has recently
note as the metal was weighed down by a
run into backwardation at LME at $2.5 MT, giving
renewed drop in oil prices. In addition to this,
mixed cues for the metal.
looming uncertainty of US Federal Reserve
Nickel three months contract continues to
meeting and a slow recovery in Chinese demand
be one of the worst performing metal amongst
after February's Lunar New Year added negative
the base metals sector as the metal ended down
factor. For today, all keys are glued to the Fed
at $13725 MT, down by around 1.44% from its
economic projections and FOMC statement
previous close. Nickel prices were hit after the
which is likely to be the trend setter for selective
LME said it may stop issuing warrants for metal
metals. Overall, Karvy Commodity recommend
stored in Malaysian warehouses which is the
selling Copper and Lead from higher levels
largest warehouse for Nickel, due to planned
whereas suggest buying Al from lower levels. In
tax reforms. On a fundamental note, inventories
case of Zinc and Nickel, they expect the metals
continued to rise with a tad decline in the
to remain range bound for the day.
cancelled warrants. In today’s session, we expect
Copper inched a percent lower yesterday and
closed around $5785 MT, from its previous close.
the metal to remain range bound for the day.
Copper prices have fallen, weighed down by a
Energy Market
renewed drop in oil prices, uncertainty ahead
Market Highlights - Crude Oil (% change)
of a US Federal Reserve meeting and a slow
as on March 17, 2015
Crude Oil
Unit
Last Prev.
day
WoW
MoM
YoY
Brent (Spot)
$/bbl
52.8
0.3
-7.5
-14.2 -51.5
Nymex Crude
(Apr’ 15)
$/bbl
43.5
-1.0
-10.0
-16.6 -55.7
ICE Brent Crude
(Apr’15)
$/bbl
53.5
0.1
-7.0
-12.9 -50.7
MCX Crude
(Mar ’15)
Rs/bbl
2885.0
-1.1
-8.2
-14.2 -52.5
recovery in Chinese demand after February's
Lunar New Year. On the fundamental note, the
rise in the inventories followed by a decline in
the cancelled warrants further propelled the
metal to remain on the lower side. However,
to its contrast, backwardation for the metal at
LME widened to $20 MT, indicating a slight ray
Source: Angel Broking
hope for the metal. Overall, Karvy expect good
Oil prices were weaker and Nymex futures
volatility in the market and recommend selling
poked to another six-year low on Tuesday.
Copper from higher levels for the day in ahead
An already glutted world oil market faces the
of the FOMC statement in the evening,
prospect of Iranian oil exports re-entering the
Aluminum continues to be the best
world supply equation. Western nations and Iran
performer amongst the base metals sector
are presently meeting and trying to agree on a
on Tuesday rising by around 0.88% from its
deal that would lift Western sanctions against
previous close. The metal prices ended on a
Iranian oil. Serious technical damage has been
positive note around $1786 MT, despite the
inflicted on the crude oil charts with the new
weaker than expected housing data from US.
for-the-move low in crude oil this week, which
Wednesday 18, March 2015
Daily
suggests prices falling still farther, with upper
$30s per barrel now very possible in the coming
weeks or few months—or sooner. Slumping oil
prices are a bearish underlying factor for most raw
commodity market, including the precious metals.
WTI crude oil prices declined by 1 percent
on Wednesday to close at $43.5/bbl. Oil prices
came under renewed pressure in Tuesday's post
settlement trade, after a 3-day losing streak, as
an industry group reported a huge build in U.S.
crude inventories ahead of official data from EIA.
Industry
group
American
Petroleum
Institute (API) said after the market's settlement
that crude stockpiles rose by 10.5 million barrels
in the week to March 13, far ahead of the 3.8
million forecast by analysts polled by Reuters.
If correct, the API number would lift total U.S.
inventories to 450 million barrels.
News & Report
Analysis
Goa mining to resume soon
as MoEF revokes suspension
of green nod
Iron mining in Goa will soon resume as the
Union Ministry of Environment and Forest on
Tuesday revoked the suspension of environmental
clearances (ECs) of mines in the coastal state,
Chief Minister Laxmikant Parsekar said. "The
MoEF on Tuesday withdrew the suspension of
ECs. The mining industry will resume operations
immediately now," Parsekar stated.
then Environment Minister Jayanti Natarajan in
September 2012 for alleged violation of rules.
The Chief Minister also said that the state
government would request the Centre to
abolish export duty on the ore with low ferrous
content. "We are sure that the Centre will abolish
duty on low-grade ore and reduce that on highgrade ore," he said. Currently there is uniform
30% export duty on the ore.
Centre re-examining bids for
9 auctioned coal blocks: Anil
Swarup
The government is re-examining the bids for
The suspension of 72 out of the total 89
nine recently auctioned coal blocks, including
approved mining leases in the coastal state
those where Jindal Steel & Power and Balco
had been lifted, said Parsekar, adding that the
emerged top bidders, amid speculation of
remaining ones were within the one-kilometre
cartelisation during the bidding process.
radius of wildlife sanctuaries. The environmental
Expecting the details would emerge in "a
clearances of mines had been suspended by the
couple of days" on what actually transpired
6
Daily
Wednesday 18, March 2015
during the bidding process for these mines,
Palma IV 3 mines, while Balco successfully bid
Coal Secretary Anil Swarup insisted that the
Gare Palma IV/1 mine and BS Ispat bagged
government wasn't looking at cartelisation
Marki Mangli III mine.
aspect at the moment.
The coal blocks which do not figure in the list
There have been reports that some bidders
of successful bidders of schedule III mines are
could have indulged in cartelisation to keep the
Brinda and Sasai mine (one bid was invited for
prices low for the concerned mines.
both the mines), Meral mine, Dumri mine, Tara
"In the schedule II, we were looking at four
mine and Mandla South mine.
mines and in schedule III we are looking at five
Asked why re-examination was required,
mines...Prima facie we found that it requires a
he said: "On the face of it, we felt that the bids
re-examination, so it has been re-examined that
that were offered were not at the same levels
is about all," Swarup stated.
as similar blocks in the same group. However,
He, however, reiterated that the government
that was not a decision per se. That was first
was only re-examining and not reviewing,
impression and that needed to be examined
"because there was no decision taken. Review
and that is why it has been examined."
happens when you take a decision".
Panels on mining and coal
bills adopt reports on them
The bids of four coal blocks of the schedule
II mines (ready to produce) which are being reexamined are Gare Palma IV 2, Gare Palma IV 3,
Gare Palma IV-1 and Marki Mangli III.
Jindal Steel and Power (JSPL) was the
successful bidder for Gare Palma IV 2 and Gare
The government moved a step closer on
Tuesday to clearing the decks for the Bills
amending the mines and minerals Act and the
coal mines Act, after the two select committees
of the Rajya Sabha that were scrutinising the
7
Daily
Wednesday 18, March 2015
laws adopted their reports.
The Congress, Left parties, Janata Dal
(United) and Samajwadi Party, however, gave
dissent notes to the reports; both panels are
chaired by members of the ruling Bharatiya
Janata Party (BJP), Anil Dave and Bhupender
Yadav. They’d be presenting their reports to the
House today.
The government is in a minority in the Rajya
Sabha and has managed to get the Trinamool
Congress, the Biju Janata Dal and the All India
Anna Dravida Munnetra Kazhagam (AIADMK)
on board, tilting the power scales within the
committees in its favour. JD(U) leader K C Tyagi,
a member of the coal committee, said, “Our
efforts for a consensus did not materialise.”
The Congress said it had key reservations
on both Bills. On coal mines, it said allocations
to state governments had not been spelt out
transparently; there was no mention of cess
and royalty that accrued to states. The Congress
is also opposed to deletion of Section 3 of the
Coal Mines (Nationalisation) Act, which gave
the government the sole right for commercial
exploitation of coal. The party in its dissent
has also raised the issue of clearly delineating
compensation to villagers and affected families.
Gold imports for Apr-Dec
period stands at $26 bn
India imported gold worth about USD 26
The country exported 38.11 tonne of gold
during the nine month period, worth USD 1.55
billion.
Sinha said that on February 18, the Reserve
Bank has allowed Star and Premier Trading
Houses to import gold without any end-use
restrictions.
In reply to a separate query, Sinha said the
government has received representation from
the Gems and Jewellery Export Promotion
Council to grant banking licence to ABN Amro
Bank, which is one of the largest financiers to
billion during the April-December period of
the diamond industry.
the current fiscal, Parliament was informed on
Mukand to transfer alloy steel
business to its subsidiary for
Rs 1,590 cr
Tuesday.
In a written reply to a query in the Rajya
Sabha, Minister of State for Finance Jayant Sinha
said 664.29 tonne of gold worth over USD 25.74
billion was imported during April- December
period of 2014-15.
Steel maker Mukand Ltd will transfer its
special and alloy steel business to its subsidiary
Mukand Alloy Steels Pvt Ltd on a slump sale
basis for Rs 1,590 crore, in a move aimed at
8
Daily
Wednesday 18, March 2015
Jewellers body hopes govt
will resolve Pan card issue this
week
The All India Gems and Jewellery Trade
Federation has written to the Government to
drop the Budget proposal making submission
of PAN card copy mandatory for purchase of
gold jewellery worth Rs. 1 lakh and above.
Until now, PAN card was required only in
the case of purchase of other luxury goods
worth over Rs. 1 lakh. Ashok Minawala, Director,
GJF, said he expects a decision to be taken on
withdrawal of this provision in the Budget by this
week. “These kinds of measures will penalise lawabiding businessmen and set back the family-run
industry which is now professionalising itself,” he
said, addressing a press conference.
About 89 per cent of the country’s population
providing greater focus on alloy steels business
does not have the PAN card and there are only
and help induct a strategic partner to drive its
14 crore card issued as per last count, he said.
future growth plans.
“It is absurd to say that people without PAN
Commenting on the development, Suketu
card are the source of black money,” he added,
V Shah, joint managing director, Mukand Ltd,
even while welcoming the Government’s move
said: "We want to achieve a sharper focus in each
to crack down on black money.
business. Since the businesses are different, they
The domestic jewellery industry is worth
have to be realigned. This will allow us to give each
Rs. 2.50 lakh crore. Of this, the rural market
business its due importance." Incidentally, Mukand
accounts for Rs. 1.75 lakh crore. For NRIs and
Alloy Steels is 99% owned by Mukand Ltd.
agriculturists without PAN card, the Government
Following the transfer of special and alloy
has a provision for them to fill up form 60 and
steels, Mukand's engineering and stainless steel
61, but Minawala feels that such forms would
business will remain with the parent company.
scare away customers, especially in rural areas.
"The deal is subject to deduction of debt
The industry, he said, has already shrunk 25 per
and net working condition adjustment. The
cent because of Government’s restrictions on
transaction will be effective on approvals,
imports, import duty of 10 per cent and fall in
including the approval of lenders," Mukand said
gold prices.
in its statement to the BSE. Mukand Alloy Steels,
Except for rings and earrings, any jewellery
which has an annual installed capacity of 3.7
purchased above 35 grams will now require a
lakh tonne in Hospet, Karnataka, accounts for
PAN card proof as it costs over Rs. 1 lakh.
bulk of Mukand's steel business.
9
Daily
Wednesday 18, March 2015
Bhushan Steel bankers
nearing $3.7 bn debt
restructuring
Bhushan Steel Ltd.’s creditors are in advanced
talks to restructure about Rs 23,000 crore ($3.7
billion) of long-term loans to the Indian steel
producer, a knowledgeable source said.
Lenders led by State Bank of India and Punjab
National Bank are discussing extending the
tenor of about Rs 20,000 crore of local-currency
term loans to around 25 years, from an average
eight years, according to three of the people.
The banks may ask for a claim over Bhushan
managing director Neeraj Singal’s stake in the
company and restrict dividend payments, the
people said, asking not to be identified as the
information is private.
The Indian steel industry has been battling
record imports that have eating into their
market share, forcing them to cut prices. Total
debt at Bhushan, which said last month it’s
“constantly facing stress in cash flow,” more
10
than doubled to 345 billion rupees in the four
years through 30 September, according to data
compiled by Bloomberg.
The plan from the group of Bhushan
creditors, referred to as a joint lenders’ forum,
involves changing the terms of the company’s
rupee term loans as well as export credit
agency- backed credit, according to the people.
The tenor of the debt would be extended under
central bank rules for “flexible structuring” of
loans to infrastructure and industrial companies,
a programme known locally as the “5:25
scheme.” The banks are still discussing the plan
and details of the restructuring could change,
the people said.
Bhushan is in the final phase of a $3.2 billion
plan to boost its capacity and produce high-value
steel products, according to a July presentation
on its website. The company’s existing creditors
are in the process of extending about Rs7,000
crore of new loans to complete the expansion,
the people said.