Monnet Ispat Ltd.: It has been promoted jointly by Mr. Sandeep Jajodia and Jindal Strips Limited for setting up a project for the manufacture of Sponge Iron at village Kurud, District Raipur, Madhya Pradesh, Jindal Strips Ltd (JSL) are providing technical know how for the project. Jindal Strips Ltd (JSL), is the flagship company of the Jindal group and is an existing, listed and highly profitable company. Its Iron Ore from captive mine has Started to flow in from the last quarter. The Company is now fully Integrated in raw material viz. coal and Iron ore.This will reduce the company dependence on the external sources and hence reduce the cost of raw materials to a large extent. Thus the price hike of Iron ore will have minimum impact on the bottoline of the integrated players, like SAIL, TISCO, etc., who have their own mines in place. Over and above the mining of coal on Raigarh coal mine has been achieved upto 0.6 mn tones per annum and is on course to be raised to 1.2 mn tones by end of FY- 2006-07. The project expansion at Raigarh is well within the schedule. The commercial operation of sponge Iron project of 0.5 mn to tones will start in the first half of FY07 and Steel and power in the second half of FY07. The Company has ealier entered into Memorandum of Understanding with Scandiuzzi SRL, Italy, for designing & manufacturing of Structural Steel products. The Company has entered into this Joint Venture with an equity contribution of 60% by the Company and 30% by Scandiuzzi SRL. The balance 10% will be offered to a strategic partner. The Joint Venture envisages the manufacture of Structural Steel Products viz. Turbine & Boiler Structures, Transmission Towers, Railway Bridges for catering to Energy, Construction & Infrastructure set-up. The Joint Venture will enable the Company to enter into Value Added Engineering Products which offer tremendous value addition and forays into Global & Local Markets in the Infrastructure Sector. Since the Company's sizable revenue is going to come from the Power Generation and Coal (which is a source of energy) consumption in future, it has changing the profile of the business of the Company. To reflect the changing business model, the Board had changed the name to "Monnet Ispat & Energy Ltd". Monnet Ispat to commission 600Mw plant in Orissa: It has also firmed up plans to set up a 600 MW pithead coal-based power plant in Orissa. The company will invest Rs 2,400 crore in the project. The plant will source coal from the Utkal B2 captive coal block in the Talcher coalfields that was recently awarded to the company. The company has got possession of 350 acres of land and is scouting for an additional 100 acres. After phase one of the project, the company plans to raise Rs 360 crore as equity for the next phase by floating an IPO. The first year generation cost per unit will be around 80 paise. Over a period of ten years, the generation cost per unit will be as low as 35 paise. Transportation costs would be low as the plant would be just four km away from the mine. The company is already in discussions with Power Trading Corporation, Adani Exports and the Orissa State Electricity Board to sell power and plans to price it at around Rs 2.20 per unit. Monnet Ispat and Energy Ltd posted a turnover of Rs 520 crore in 2004-05 and expects to post a turnover of Rs 700 crore for 2005-06. The company's net profit for the last fiscal is expected to be around Rs 130--Rs.140 crore. The full EPS of the company will be around Rs.45--Rs.50, which gives the fair valuation of the company at around Rs.450 to Rs.600. Previously Monnet Ispat Ltd had mopped up $60 million by way of foreign currency convertible bonds (FCCBs). The FCCBs, having a maturity period of five years, are convertible at a price of Rs 317.20 per share, at a premium of 24.09 per cent. Also, the bonds entail a green shoe option of $15 million and carry a zero coupon rate with a yield to maturity set at 7.6 per cent. The company is expected to come up with very good results accompanied by decent dividend on 30th June when they meet in AGM. The conservative first target of the company is around Rs.350 and then there is no stopping of the company. The stock could shoot to above Rs.500 within a 18 -24 months, the way its power projects are going on. I would advise all to keep holding the counter and enter on all dips in this BLUE CHIP Steel Counter. Best wishes, Suman Mukherjee, India. suman2005s@rediffmail.com http://finance.groups.yahoo.com/group/SumanSpeaks/ www.bcozindia.com( Market Watch Section) http://rupya.blogspot.com/