Vedanta eyeing more stressed steel assets

Vedanta had submitted an EoI for the unlisted Bhushan Power & Steel, and emerged as a qualified bidder

Vedanta is looking to up its ante in the battle for stressed steel assets, albeit a little late.

The natural resources conglomerate had submitted an expression of interest (EoI) for Electrosteel Steels. However, according to sources the EoI came 10 days after the last date of submission, which was October 9.

“The EoI is not being accepted,” the sources said. The qualified bidders for Electrosteel Steels are Srei Infrastructure Finance, Tata Steel, Mesco Steel, Edelweiss, Avalokiteshvar Valinv Ltd and Electrosteel Castings. Technically, however, it would be possible for Vedanta to align with any of the qualified bidders, the sources indicated. 

An e-mail sent to Vedanta remained unanswered. 

Electrosteel has a planned capacity of 2.51 million tonnes (mt) and has commissioned 1.5 mt. It was one of the 12 assets recommended by the Reserve Bank of India (RBI) for insolvency. The others facing insolvency in the sector are Bhushan Power & Steel, Bhushan Steel, Essar Steel and Monnet Ispat & Energy.

For Vedanta, steel would be an uncharted territory. In an earlier interview, Vedanta Resources Chairman Anil Agarwal had said that the firm would only bid for assets that gave return on capital.

From Vedanta’s interest in the assets, it appears that the firm was primarily eyeing acquisitions in the east. Vedanta had submitted an EoI for the unlisted Bhushan Power & Steel, too, and emerged as a qualified bidder. 

Bhushan Power has a steel-making capacity of 3 mt across Odisha, West Bengal and Chandigarh. A hot-rolled steel facility is in Odisha and cold-rolling facilities are in Kolkata and Chandigarh. It also has a captive power plant, a pellet plant and an iron-ore beneficiation plant. If Vedanta finally bids for Bhushan Power, it would be up against JSW Steel, Tata Steel, AION Capital, an investor from the UAE, and existing promoter Sanjay Singal. 

Sources also expect Vedanta to throw its hat in the ring for Bhushan Steel, which has a 5-mt plant in Odisha apart from facilities in Uttar Pradesh and Maharashtra. JSW Steel, ArcelorMittal and Tata Steel were also likely to participate in the bidding process for Bhushan Steel. The resolution plans for Bhushan Steel would have to be submitted by December 23.