In order to expand its manufacturing ability, the largest producer of stainless steel, Jindal Stainless has decided to invest Rs 60 billion over the next two years.

The major portion of the investment would be utilized for the construction of its stainless steel facility in Jajpur, Orissa, where the company has already spent Rs 2,250 crore in setting up of phase-I of 0.8 MT capacity.

Ratan Jindal, Jindal Stainless Vice Chairman and Managing Director said, “We would spend about Rs 5,600 crore in the setting-up of second phase of 0.8 MT per annum of steel in Jajpur in Orissa. The plant would be commissioned by 2012.”

Around Rs 32 billion will be borrowed from Indian as well as foreign banking institutions for the project, whereas Rs 10 billion would be lifted through external commercial borrowings. The remaining Rs 12 billion would be funded through internal accruals.

“The promoters will infuse equity of the balance amount of Rs 2 billion,” Mr. Jindal said.

The company's plant at Hissar in Haryana would need Rs 400 crore for its development.

"We would take our current cold rolling capacity of 0.275 MT at Hissar to about 0.4 MT by the end of next year," Mr. Jindal added.

The company would raise funds through internal accruals for investment in Hissar plant.

With new capacities being planned in two phases of 0.8 MT each in Orissa, the total capacity of the company would be 2.5 MT by 2012, making it one of the biggest integrated stainless steel manufacturers in the world.

Jindal also plans to swell its ferro-chrome unit in Vietnam from the subsisting 60,000 ton to 2,00,000 ton.

The shares, on Friday, of the company gained 1.9% at Rs 131.55 on the Bombay Stock Exchange (BSE). The total volume of shares traded was 52,732 at the BSE (Friday).