Monnet Ispat Limited, managed by the Monnet group was promoted by O P Jindal of the Jindal group of Companies, in 1990. The main business of the company is sponge iron, char and M S ignots, sugar, rice, power generation and Ferro Aloys. The company’s plants are located at Mandir, Hasaud, Raipur in Chhattisgarh. The company’s Sponge iron business however, continues to be buoyant on account of the falling imports and higher landed cost of scrap. Monnet Ispat Limited has signed an MOU with the Chhattisgarh State Industrial Development Corporation (CSIDC) an investment agency of the Govt. of Chhattisgarh, for undretaking Steel and Allied Projects in Raipur and Raigarh , upto a proposed Investment of Rs. 1160 Crores. The Company will have complete Sales tax exemption as per the State Govt. laws on the production effected by the present and future expansions.

Products & Services:

Company is in the business of sponge iron, char and M S ingots, sugar, rice, power generation and Ferro Aloys. The company’s plants are located at Mandir Hasaud, Raipur in Chhattisgarh. The Company is planning to further enhance the capacity of Sponge Iron in order to become highly competitive by lowering production cost and also increase market share as well as explore new markets for better price reliability. It is also taking initiatives to increase exports and develop new export markets.

Recent Developments:

Company announced to set up 1,200 MW power plant in Orissa, which is to be developed through its subsidiary - Monnet Power Company with an investment of Rs 42 billion. This is said to be company’s first venture into commercial power generation. For the project, the company has already been allotted a coal mine in Orissa along with two other players. The total capacity of the mine is 300 million tons out of which the company’s share is 100 million tons.

Company also purchased its shares with a maximum buy back price of Rs 300 a share which is at a premium at market price. The board has also approved the setting up of two new projects. First is a Pelletization / Benefitiation plant for iron ore of 1.2 million ton per annum (TPA). Second is for purpose of setting up of an additional power capacity of 75 mega watt (MW) at Raigarh along with the ongoing steel project.

Company announced that the Mount Everest Trading & Investment (MTIL) has executed share purchase & shareholders agreement to acquire 5,420,000 equity shares of Orissa Sponge Iron & Steel (OSISL). Since OCIL is a listed company, the agreement makes it necessary for MTIL to make an announcement to the public inviting competitive bid from the shareholders of OCIL.

Valuation:

At current market price, stock is trading at an attractive valuation of 4.67 P/E multiple of its FY2010 estimated earning par share. We Recommend investors to buy ”Monnet Ispat” for
short to medium term investment prospective.