UK-based Nithia Capital eyes 3.5 MT steelmaking capacity in India: CEO

Government infrastructure will fuel domestic steel consumption for two years, says Jai Saraf

Nithia Capital, the UK-based global advisory and investment firm, plans 3-3.5 million tonnes (mt) of steelmaking capacity in India through a mix of acquisition and expansion of existing assets, said its leader.

Nithia in partnership with CarVal Investors acquired Uttam Galva Metallics (UGML) and Uttam Value Steel (UVSL) in 2020 for a total consideration of more than Rs 2,000 crore. Uttam’s assets were on the Reserve Bank of India’s list of non-performing assets (NPAs) for debt resolution under the Insolvency and Bankruptcy Code (IBC).

Since then, the iron-making capacity at UGML has increased three-fold to 1.5 million tonnes per annum (mtpa) and plans are afoot to make the Wardha Steel Complex a 2.5+ mtpa steelmaking complex. The capex for this is being evaluated.

"The Wardha Steel Complex will be a significant part of our India strategy,” said Jai Saraf, founder and chief executive officer of Nithia Capital.

UGML and UVSL—Nithia's flagship Indian investments—form the Wardha Steel Complex near Nagpur. The companies will be renamed Evonith Metallics (EML) and Evonith Value Steel (EVSL) once legal and compliance formalities are completed.

Nithia has launched the Evonith brand in India for all its investments. Nithia has reduced its exposure in Crest Steel & Power, which it acquired in partnership with Amalgam Steel earlier this year under the insolvency law. Nithia had majority control in the partnership, but it would exit and Amalgam would take the lead, Saraf said.

He clarified that this would not dent the strategy of having a 3-3.5 mt steelmaking platform in India.

Discussions are currently on for two steel assets, said Saraf. It would be co-investment into facilities privately owned by other groups and not under IBC, he said.

Nithia’s plans are buoyed by India’s economic growth. The steel market is sluggish in the short-term, but Saraf believes that in the next two years, with the general elections in 2024, more infrastructure projects by the government would fuel domestic steel consumption.

Nithia plans to expand in power, infrastructure, mining and sectors it is not averse to partnerships for acquisitions.

Globally, Nithia has invested $500 million in resource assets, excluding India. They all have minority financial partners.