Jindal Praxair Oxygen, which primarily supplies oxygen to JVSL's steel plant at Bellary, is a 50:50 joint venture between JVSL and the $4.7-billion Praxair Inc of the US.

Top JVSL officials said the company has received the necessary approvals from the Reserve Bank of India (RBI) to dilute its 24 per cent stake in favour of Praxair. As per the agreement between the two companies, Praxair India will fund the second phase of the oxygen plant with an investment of Rs 190 crore.

Officials said the company is going slow with the expansion plan of the second phase due to ground realities. ``The second plant, which is expected to come up in an adjacent location, will produce nitrogen and argon apart from oxygen. The plants with a capacity to produce 2,500 tonne per day will also sellsurplus gases to third parties,'' officials said.

Though the company is adopting a go-slow strategy, Praxair has already tied-up term loans from the Industrial Finance Corporation of India (IFCI) and ICICI for Rs 190 crore and Rs 70 crore, respectively for the project. The first phase of the oxygen plant with a project cost of Rs 200 crore was commissioned recently.

The Toranagallu steel facility of Jindal Vijayanagar has a manufacturing capacity to produce 1.60 mtpa of steel. JVSL commissioned the first phase of the roughing mill of its hot strip mill in March 1997 and commercial production of HR coils has already started.

Praxair India Pvt Ltd managing director Indrajit Mookerjee told The Financial Express that despite the recessionary conditions in the domestic market, Praxair is going to invest about Rs 800 crore here over the next two years. It is also examining the possibilities to acquire existing units to enhance business.

While a part of the funds for the purpose will come as equity, anotherportion is likely to be raised as term loans for which Praxair India is holding talks with Bank of America, ANZ Grindlays and State Bank of India. The company has already pumped in around Rs 600 crore in the country over the last few years.

During the last fiscal it had acquired the gas production units and distribution facilities of Calcutta-based Asiatic Oxygen Ltd. Praxair also had acquired the nitrogen and oxygen businesses of Deep Oxygen Pvt Ltd, Mysore.

The company has also made into the small on-site business, bagging contracts from Sundaram Fasteners, Tata Timken and International Ferrites for nitrogen plants.