Tata Steel to consider take over of firms at NCLT

Five stressed steel companies have been referred to the NCLT by RBI in a recent directive

Tata Steel will evaluate, on the basis of the parameters of transparency and feasibility, taking over steel firms referred to the National Company Law Tribunal (NCLT).

“If it is a transparent process, which it appears from the way the code has been drafted, we will evaluate and see. Our board has to be comfortable whether it is a good thing or not,” Koushik Chatterjee, group executive director (finance, corporate and Europe operations), Tata Steel, said in response to a question from Business Standard, on the sidelines of the annual general meeting of Tinplate Company of India.

Later, he said the way in which the NCLT had been set up and the process that had been laid out showed the modus operandi of the tribunal was poised to be transparent.

Five stressed steel companies — Essar Steel, Monnet Ispat and Energy, Electrosteel Steels, Bhushan Steel, and Bhushan Power and Steel — have been referred to the NCLT by the RBI in a recent directive.

However, Chatterjee said evaluating organic growth at its plants in Kalinganagar and Jamshedpur would be done first. 

“We have completed Kalinganagar, and we have space there. Therefore, we can grow significantly. We are looking at Jamshedpur too. So there are huge organic opportunities. We have to see what inorganic opportunities there are on a comparative and feasibility basis because we are not drivers. There are people whose stakes are significant in companies that have gone to the NCLT,” he said.

According to Chatterjee, organic expansion gives the company control over the product portfolio but in the case of acquisitions, one has to be content with what’s on offer.

“When you are looking at inorganic growth, it is already there and you have to see whether it fits or doesn’t fit. So let me see who the candidate is, and then I will be able to say whether it fits.”

The company has come up with a 3-million-tonne-per-annum (mtpa) plant in Kalinganagar and there is scope for scaling it up to 18-20 mtpa. The Jamshedpur facility has the capacity of 10 mtpa and will add another one million tonne.