2 NOV, 2012, CR SUKUMAR, ET BUREAU
HYDERABAD: Iron ore miner NMDC will become the majority owner of a major seaport in Andhra Pradesh, marking one more attempt at diversification by the cash-rich state-owned company.
NMDC will invest in a port project in Ramayapatnam in Prakasam district, about 350 km north of Chennai, making the fishing village only the country's fourteenth major port, people familiar with the development said.
Andhra Pradesh's only other major port is in Visakhapatnam. With over Rs 20,000 crore in cash on its hands, NMDC announced a diversification binge as part of a plan to invest more than Rs 30,000 crore in the next five years. Apart from aggressively pursuing coal, iron ore and rock phosphate assets abroad, it will set up two integrated steel plants and diversify into power generation as well.
A senior NMDC official said the new seaport will help the company import coal for its integrated steel project coming up in a joint venture with Russian steelmaker Severstal near Bellary in Karnataka, and also to export the steel.
But some analysts were sceptical if NMDC should own a majority stake in a port project. "It makes sense only if they have control over the entire evacuation logistics including rail and road connectivity," said Sanjay Jain of brokerage Motilal Oswal.
The Andhra Pradesh government will hold a 11% stake in the new port company in exchange for about 4,500 acres and the relief and rehabilitation package, National Shipping Board chairman PVK Mohan said.
Of the rest, NMDC will have a majority holding while public sector enterprises like the Vizag Seaport, Cochin Shipyard and Indian Farmers Fertiliser Cooperative Ltd (Iffco) will also be given shares. Mohan said Cochin Shipyard is interested in setting up a shipyard with two berths at Ramayapatnam.
NMDC, which is owned 90% by the government, posted sales of Rs 11,262 crore and net profit of Rs 7,265 crore in 2011-12. It is also part of a consortium developing a vast iron ore mine in Afghanistan.
"The ownership in the first phase of the seaport project, consisting of six berths involving an investment of around Rs 8,000 crore, will be confined to the government-owned entities," said Mohan. "We will consider roping in the private sector players in the next phase of the project."
HYDERABAD: Iron ore miner NMDC will become the majority owner of a major seaport in Andhra Pradesh, marking one more attempt at diversification by the cash-rich state-owned company.
NMDC will invest in a port project in Ramayapatnam in Prakasam district, about 350 km north of Chennai, making the fishing village only the country's fourteenth major port, people familiar with the development said.
Andhra Pradesh's only other major port is in Visakhapatnam. With over Rs 20,000 crore in cash on its hands, NMDC announced a diversification binge as part of a plan to invest more than Rs 30,000 crore in the next five years. Apart from aggressively pursuing coal, iron ore and rock phosphate assets abroad, it will set up two integrated steel plants and diversify into power generation as well.
A senior NMDC official said the new seaport will help the company import coal for its integrated steel project coming up in a joint venture with Russian steelmaker Severstal near Bellary in Karnataka, and also to export the steel.
But some analysts were sceptical if NMDC should own a majority stake in a port project. "It makes sense only if they have control over the entire evacuation logistics including rail and road connectivity," said Sanjay Jain of brokerage Motilal Oswal.
The Andhra Pradesh government will hold a 11% stake in the new port company in exchange for about 4,500 acres and the relief and rehabilitation package, National Shipping Board chairman PVK Mohan said.
Of the rest, NMDC will have a majority holding while public sector enterprises like the Vizag Seaport, Cochin Shipyard and Indian Farmers Fertiliser Cooperative Ltd (Iffco) will also be given shares. Mohan said Cochin Shipyard is interested in setting up a shipyard with two berths at Ramayapatnam.
NMDC, which is owned 90% by the government, posted sales of Rs 11,262 crore and net profit of Rs 7,265 crore in 2011-12. It is also part of a consortium developing a vast iron ore mine in Afghanistan.
"The ownership in the first phase of the seaport project, consisting of six berths involving an investment of around Rs 8,000 crore, will be confined to the government-owned entities," said Mohan. "We will consider roping in the private sector players in the next phase of the project."
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