Ferro Alloys Corporation Ltd Share Price

Summary

Ferro Alloys Corporation (FACOR) as an old as the Indian ferro alloy industry. Starting out with limited facilities to manufacture ferro manganese in 1957, it has grown today to become the largest producer of ferro alloys, producing almost all kinds of ferro alloys. It has production facilities in Maharashtra for various ferro alloys (inst. cap. : 72,500 tpa), rolled steel (45,000 tpa) and a 100% EOU for charge chrome (50,000 tpa). The fortunes of the ferro alloy industry are linked to the ups and downs of the steel industry, as ferro alloys are used in the production of steel. It is a power-guzzling industry and power tariff constitutes 35-40% of the production cost in India. The ever-increasing power tariff has led FACOR to enter into several disputes with the SEBs and, today, its outstanding litigation fees amount to around Rs 14 cr.The producers are not able to pass over the increase in the cost of production, mainly due to the presence of a large number of small-scale units which enjoy exemptions from excise duty and sales tax, and power tariff concessions. Enjoying a market share of more than 50%, they have pushed many established units, including FACOR, into the red. FACORs charge chrome unit, too, has performed badly as international prices touched rock bottom. To meet its working capital requirements, the company raised Rs 18.34 cr through a rights issue of equity shares in May 93 (premium : Rs 25). In terms of a rehabilitation package, the company has agreed to issu
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