The board of the Steel Authority of India (Sail) gave its in-principle approval to six projects, involving a total expenditure of over Rs 11,000 crores on Friday. Leading the list is a proposal for expansion of IISCO Steel Plant (ISP) at Rs 9,592 crores, incorporating latest technologies.

Projects worth nearly Rs 6,000 crores are currently being executed in the Sail plants and mines. The company has laid a thrust on capital expenditure in order to achieve its new target of producing 22.5 million tonnes of hot metal in about 4 years.

Sail chairman V.S. Jain, who presented the company’s first quarter results at a press conference, said that they would fund their Rs 11,000-crore expansion plan through internal accruals. He said, "Our internal accruals will suffice to take care of our capital expenditure." Mr Jain said that the company is seriously considering two or three proposals to acquire coal mines oversees. It is is looking at proposals from Canada, Australia and Russia for the acquisitions, he said.

The unaudited financial results for April-June 2006 showed a profit after tax (PAT) of Rs 1,386 crores, a 23 per cent increase over the same period last year. This is the highest PAT achieved by Sail in any Q1, Mr Jain said. At Rs 8,412 crores, the sales turnover of the company was also 29 per cent higher than that of the first three months of 2005-06.

The improved financial performance was achieved despite a 27 per cent increase in price of imported coking coal in Q1 of the current financial year over the corresponding period last year. Prices of other metallic inputs like zinc and aluminium, too, were very high. Strong market pull, however, led to record saleable steel production of 3.1 million tonnes (9 per cent growth) and sales of 2.45 million tonnes (30 per cent growth)

Continuing with its status as a virtual debt-free company, Sail said it reduced its borrowings from Rs 4,298 crores as on March 31, 2006 to Rs 4,000 crores on June 30, 2006. The company’s interest outgo during Q1 this year, too, was substantially lower at Rs 94 crores. Mr Jain said, "We have the potential to raise Rs 13,000-14,000 crores in debt."

The public sector Andhra Bank will be raising interest rates in the wake of the hike in the reverse repo rate 25 basis points by the Reserve Bank of India, K. Ramakrishnan, the bank’s chairman and managing director, said on Friday. The increase could be between 25 to 50 basis points. Mr Ramakrishnan said an internal committee of the bank was discussing the interest rate hike, and a decision was likely to be announced next week.

"An increase in the interest rates appears imperative because cost of funds will now be higher," he said. Mr Ramakrishnan said that Andhra Bank was considering a proposal to launch operations in the United States, which has a large non-resident Indian population, particularly from Andhra Pradesh. The paperwork for the proposal had begun, he said, adding that obtaining a banking licence in the US was time-consuming and tough process. The bank was also planning to set up representative offices in Qatar and Saudi Arabia, which have large Indian expat communities. Meanwhile, Andhra Bank reported a net profit of Rs 116. 41 crores in the first quarter of 2006-07, up 36.70 per cent over the Rs 85.16 crores in the same quarter of last year. The bank’s interest income had increased by 23.11 per cent to Rs 759 crores, against the Rs 617 crores.