[SMM Analysis] Vraj Iron & Steel approves 201,000 TPY Sponge Iron Expansion in India

India's Vraj Iron & Steel Ltd has approved the first phase of a 450 crore rupees ($52 million) greenfield integrated steel project in the eastern state of Chhattisgarh, adding 201,000 tonnes per year (tpy) each of sponge iron and mild steel billets. The company expects the first phase to be commissioned within 30 months of the groundbreaking ceremony.

The expansion, to be developed at Chapka village in Bastar district, will also include a 15 MW waste heat recovery (WHR) captive power plant and a 15 MW circulating fluidized bed combustion (CFBC) captive power plant.

The board has approved the transfer of the project land from promoter and holding company Gopal Sponge and Power Pvt. Ltd. to Vraj Iron & Steel. Environmental clearance issued by India's Ministry of Environment, Forest and Climate Change (MoEFCC), together with other statutory approvals and permits obtained for the project, will also be transferred to the company.

The project carries an estimated investment of INR 4.5 billion (including GST). The company plans to finance INR 1.5 billion through internal accruals and equity infusion, while the remaining INR 3 billion will be raised through debt.

Following the expansion, Vraj will nearly double its annual sponge iron capacity from 235,500 tonnes to 436,500 tonnes, while billet capacity will increase from 210,600 tonnes to 411,600 tonnes. The company currently also operates 54,000 tpy of TMT bar capacity, a 17 MW WHR power plant and a 15 MW solar power plant.

For the financial year ended March 31, 2026, the company reported revenue from operations of INR 5.88 billion, up 23.8% year-on-year. EBITDA increased to INR 770.1 million rupees, while net profit rose to INR 320.1 million. Capacity utilization reached 94.2%, with steel sales of 198,487 tonnes during the year.

The expansion reflects continued investment by secondary steel producers in India's sponge iron segment, supported by robust domestic steel demand and capacity utilization levels. The additional sponge iron and billet capacity is expected to strengthen Vraj's upstream integration while increasing billet availability in the central India steel market.