State-owned SAIL on Monday said it will spend about Rs 1,75,000 crore to augment its annual production capacity to 60 million tonnes by 2020 from the current 14 million tonnes.
“There will be investment to the tune of Rs 1,75,000 crore, by 2020, including what is ongoing,” SAIL chairman, Mr S. K. Roongta, whose four-year term as the PSU chief comes to an end on Monday.
India’s largest steel maker may raise debt to meet 60 per cent of its funding needs to take the capacity to 60 million tonnes by 2020, besides using cash reserves of Rs 22,000 crore.
“It has to be both internal accruals and borrowings. When the projects are firmed up, then we will decide. Even if it is 40 per cent internal and 60 per cent borrowing, it is prudent,” Mr Roongta added.
Currently, the steel maker is in the process of expanding its capacity to 23 million tonnes by 2012 at a gross sum of Rs 70,000 crore. “That remains our target (to take the capacity to 60 million tonnes). It is our directional plan and target,” he added.
Besides the ongoing expansion programme, the company is looking to tie up with majors such as Posco, ArcelorMittal and Tata Steel.