KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

SUMMARY
The following summary is qualified in its entirety by the more detailed information and the financial statements of the
Company that appear elsewhere in this Prospectus. Unless otherwise stated, all financial and other data regarding
our business and operations presented in this Prospectus are presented on the basis of Audited Financial Statement
for the year ended 31st March, 2005 and for the period ended 31st August 2005.
Overview of the Industry
Steel industry was one of the first to benefit from economic liberalization in India in the early 1990s as licensing was
abolished, prices decontrolled and hurdles in distribution removed. The government also supported free inflows of
foreign capital, technology, equipment and raw materials and as a consequence, several steel manufacturing units
were set up in the private sector. In this favorable scenario, the share of the private sector in our crude steel
production went up, considerably. Today, India is the ninth largest steel producer in the world with its annual production
in 2004 at 32.6 Mn tons. This accounts for 3% of global steel production.
The economic reforms initiated by the government since 1991 have added a new dimension to industrial growth and to
the steel industry in particular. Licensing requirements for capacity creation are abolished except for certain restrictions
pertaining to any particular location. The steel industry has been removed from the list of industries reserved for the
public sector and automatic approval of up to 100% foreign equity investment has been allowed. Price and distribution
controls too been removed from January 1992 with a view to make the steel industry efficient and competitive.
Restrictions in external trade, both in import and export of steel have been removed and import duty on raw materials
and finished steel has been reduced, gradually. Certain other policy measures taken by the government over the
past decade like reduction in import duty of capital goods, convertibility of rupee on trade account, permission to
mobilise resources from overseas financial markets, and rationalisation of tax structures have benefited the Indian
steel industry.
The total production of finished carbon steel in India was 38.40 Mn tonnes in 2004-05 as compared to 14.33 Mn
tonnes in 1991-92 – indicating an increase of 7.29% CAGR. The high share of secondary sector in finished steel
production is largely due to substantial supplies of semis, the basic feed material procured from the main producers
to convert into whichever shapes by rolling.
(Source: Ministry of Steel – www.steel.nic.in)
Overview of our business
M/s. Kamdhenu Ispat Limited (the “Company”) is an unlisted public company. The Company is presently involved in
the business of manufacturing Steel Bars, which is used in the Construction of Multistoried Buildings, Dams, bridges,
flyovers, and power plants as a basic reinforcement material. The Company is manufacturer of CTD Bars, TMT
Bars. The Company is using the “Tempcore Process”, which is the most advanced technology worldwide for
manufacturing TMT Steel Bars. The Company’s products meet IS 1786-1985 and ISO 9001:2000 specifications.
The main manufacturing facility of the Company is situated at Bhiwadi ( Rajasthan). The Plant Capacity is 48000
MetricTonnes per annum and ingot manufacturing capacity is 22,500 Metric Tonnes per annum.. We also have
Franchisee arrangements with 26 entities to manufacture Steel Bars across India, 2 entities for manufacturing
cement and 1 for manufacturing of POP. Two of such plants are located in Rajasthan, while one plant is located in
Kanpur. The other plants are located at Ghaziabad, Mandi Gobindgarh (Punjab), Nallagarh (HP),), and Baddi (H.P.),
Indore (M.P), Jammu, Goa, Bihar, Gujarat, West Bengal, Jharkhand, Chennai, Guwahati, Hosur, Varanasi and
Ludhiana. All these plants are using Automatic German Technology which makes Steels Bars at a speed of 32
seconds as against 52 seconds of other normal plants.
The Franchisee manufacturers Steel Bars under the “KAMDHENU” Brand. The working arrangement with these
Franchisee Entities is described in more details in section of Our Business Strategy appearing on page no [.] of this
prospectus. The total combined capacity of all these units is at present [.] MT. The Company is also in advance stages
of finalizing strategic tie-ups with some more parties in unrepresented areas and it is expected that the products under
the “KAMDHENU” Brand should be available in majority of the states in India. The combined capacity available with the
company post these tie-ups is expected to be between 7,92,000 to 9,00,000 tons per annum.
The company has a network of more than 1750 distributors and dealers spread across the States of Delhi, Haryana,
Uttar Pradesh, Uttranchal, Rajasthan, Punjab, Himachal Pradesh, Madhya Pradesh, Jammu & Kashmir, Maharashtra,
Goa, Gujarat, West Bengal, Bihar, Jharkhand, etc.
In addition to the above, the our Group Company M/s Kali Metals (P) Ltd in which we have 30% shareholding, is
setting up a Steel Rolling Mill near Bangalore with a total outlay of Rs. 550.00 Lacs. The plant will have a capacity to
produce 48,000 metric tonnes per annum of Reinforcement Steel Bars.
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