Why is Jayaswal Neco buzzing in trade of-late?

In an interview with CNBC-TV18, K Bharadwaj, chief financial officer of Jayaswal Neco, spoke about latest happenings in his company and the road ahead.

Below is a verbatim transcript of the interview. Also watch the video.

Q: You have a capex plan of around Rs 3,000 crore. When we spoke to you some time back you said that you are looking at a possible debt-to-equity ratio for this funding. Can you give us a breakup of funding of this Rs 3,300 crore?

A: We are implementing two-three kind of strategies for enhancing shareholders' wealth. We are leveraging all our coal blocks, which we have been allotted to us. These coal blocks have been allotted for captive consumption to us. We have one coking coal block in Jharkhand and already we did a financial closure for development of this coal block.

Currently, we are importing around three lakh tonne of coal from Australian suppliers. The price volatility and the timely delivery is a major concern as of date. We are going to develop this coal block. We are going to spend around Rs 200 crore in developing this coal block. The financial closure has already being done.

We are also announcing hike in our coke oven capacity, from one lakh tonne to two lakh tonne. We are spending again around Rs 150 crore in increasing the capacity.

Apart from that we have largely non-coking coal block at Raigad. We are announcing our capacity from 50,000 tonne to three lakh tonne and for that purpose we are putting up sponge iron plant. Currently, our adjusting capacity of sponge iron plant is around two-and-a-half lakh tonne, which we are announcing to additional three lakh tonne.

Q: The last time we spoke you said that there could be some amount of equity raising via a QIP to fund some amount of this capex. You said there was Rs 2,100 crore via debt and remaining could be via internal accruals and QIP. Can you give us an update on both these aspects and the amount of debt you have tied up and the QIP funding?

A: We are still working on the QIP. We are still looking at various options for raising equity for these projects. Definitely one is the internal accruals because these projects are going to take shape in the next two-three years. So, internal accruals spanning for the next three years is one source of funding these projects.

QIP is definitely one source but we are waiting for a right time for announcing the equity. When the time will come we will go for other options but right now our focus is to get the financial closure which we have already done.

Q: We understand you were waiting for some environment clearances for your coal mines in Chhattisgarh. Also, last year there were lot of reports doing the rounds that you could be issued notices for not developing the coal mines which were allocated to you on time and the government might look at taking back all this. Could you give us an update and has the work started at Chhattisgarh?

A: In Chhattisgarh, we have two non-coking coal reserves located at Raigarh particularly in Gare IV/4 and IV/8. Currently, we are expecting around 50,000 tonne per month and we have a plan to enhance this capacity from 50,000 tonne to 300,000 tonne per month because we are putting up a DRI plant and already we have got majority of the environment clearances, mostly land has already been acquired and Gare IV/4 is already right now operational and we are quite hopeful that within next six months time we will be able to operationalise IV/8.

Q: So there is no possibility of any of your coal mines asked to give it back to the government?

A: No, not at all. We are quite confident that there is no such possibility.

Q: What would your FY12 revenues and also your profit figures look like because you are also raising money via debt that will hurt your interest cost?

A: The kind of business strategies that we have at least 15-20% in bottomline in 2009-10 our turnover was around 1,930 crore and 2011 it