Goa-based business group Dempo which is one of the biggest players in iron ore in India, is in talks with private equity firms to raise around Rs 1,200- 1,500 crore by selling 20-40 percent stake in its flagship company VS Dempo. VS Dempo is currently a private held firm of the Dempos. The Rs 2,000-crore group is in talks with three PE firms and the deal is likely to be sealed by the end of this month, according to thisreport.

The funds are being raised to expand the group's petroleum coke business which is under Goa Carbon by over 70%. The group is looking to set up a plant in Gujarat near Vadodara with additional funds. Earlier the plan was to sell off the entire iron ore business but the group has now decided to sell a substantial minority stake in VS Dempo instead.

Ambit is the investment advisor to Dempo for the transaction. The group is also in the process of merging two other subsidiary companies which are into mining with VS Dempo which could add to the overall valuations of the firm while consolidated the mining business under one umbrella.

The new plant in Gujarat would target an outlay of Rs 500 crore-Rs 1,000 crore in a couple of years.

Earlier, it was announced that Goa Carbon would invest an additional Rs 200 crore to put up a 18-mw power plant across its three operating facilities in Paradip, Bilaspur and Goa and more than double the capacity of its Paradip plant to 2,20,000 tons per annum (TPA) from 1,00,000 tpa now.

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