The Rs 310-crore project, involving term loans of Rs 217 crore, is now being appraised by financial institutions (FIs). Company sources said the institutions had indicated an "in-principle approval to participate in the project."

Jindal Strips' efforts to rope in an overseas partner for the project failed because of the high cost of imported equipment. Ugine had preferred capital equipment worth $ 200 million (Rs 800 crore) for a mill of 60,000 tonnes-per-annum capacity.

Jindal Strips is setting up a mill of the same size at less than half the investment. The company, which estimates a 15 per cent growth in net profit for the year gone by, up from Rs 55 crore in 1996-97, and 26 per cent growth in turnover from Rs 1,030 crore, will invest Rs 93 crore in the CRM from its internal accruals.

The proposalis being appraised by the Industrial Credit and Investment Corporation of India (ICICI), the Industrial Finance Corporation of India (IFCI) and the Industrial Development Bank of India (IDBI). Mecon is the technical consultant for the project.

Support of the FIs is significant at a time when they have turned chary of any kind of exposure to flat-steel ventures. A sudden glut in flat-steel market in the last two years have sent prices and, consequently, profit margins of steel companies hurtling down.

Jindal Strips' top-brass point out that the 60,000 tonne-per-annum-capacity mill was not a greenfield project, but forward integration for the company.

Even institutions like ICICI, IDBI and IFCI, which had vowed to keep away from greenfield projects in flat-steel, are not averse to financing turnaround ventures like modernisation and expansion of existing mills.

For Jindal Strips, the new CRM is not a life-saving strategy, but a tactic for a more integrated growth. Over the last two years, the companyhas upgraded the capacity of its steel mill to 2.5 lakh tonne from 1 lakh tonne a year.

The existing CRM's capacity of 30,000 tonne-per-annum, only allows Jindal Strips to add value to 12 per cent of its hot-rolled stainless steel. The new mill will enhance the company's cold-rolling capacity to 90,000 tonne and enable it increase its range of value-added products to 36 per cent of the total production, which was close to 1.8 lakh tonne last year.

Contrary to the industry trend, where higher output has brought down profit margins in the absence of demand, Jindal Strips attributes an estimated 15 per cent jump in last year's net to "growth in volumes." The growth has brought economies of scale to the company, which has remained insulated from the industry-wide recession because of its 40 per cent grip over a niche market.

Jindal Strips is the single-largest producer of stainless steel strips. The Salem steel plant of the Steel Authority of India Limited (SAIL) has the highest cold-rolling capacity at70,000 tonnes-per-annum.

Together, Salem Steel and Jindal Strips, cater for the bulk of the country's annual consumption of six-lakh tonne of stainless steel flats. The rest of the domestic demand is met from imports.

The demand for stainless steel from utensil-makers and industries like shaving-blade manufacturers, has grown by roughly eight per cent, compared to the less than two per cent growth in the consumption of other grades of steel.