Tata Steel acquires over 4.68 crore shares of Neelachal Ispat Nigam for Rs 300 crore

Tata Steel said that as part of the first tranche of investment in Neelachal Ispat Nigam (NINL), the company has acquired 4,68,75,000 equity shares of its unlisted indirect subsidiary NINL for an amount aggregating to Rs 300 crore.

Neelachal Ispat Nigam has a 1.1 MTPA integrated iron and steel plant at Kalinganagar Odisha, along with iron ore mines with a reserve of approximately 90 million tonne (MT). The company's turnover for financial year 2021-22 was Rs 257.58 crore.

Offering the rationale for the said investment, Tata Steel stated that the proposed funding will be utilized towards the working capital and capex requirement of NINL, including start-up of iron and steel plant at Kalinganagar, repayment/prepayment of liabilities and for other general corporate purposes.

Post this acquisition, Tata Steel's stake in NINL would increase to 5.23% from 1.88% stake held earlier.

In February last year, Tata Steel Long Products, a subsidiary of Tata Steel, had won the bid to acquire Neelachal Ispat Nigam for around Rs 12,100 crore.

In July 2022, Tata Steel Long Products had completed the acquisition of 93.71% stake in Neelachal Ispat Nigam from MMTC, NMDC, MECON, Bharat Heavy Electricals, Industrial Promotion and Investment Corporation of Odisha, Odisha Mining Corporation, President of India, Government of Odisha.

"The acquisition has been completed as per the terms and conditions of the Share Sale and Purchase Agreement entered on March 10, 2022 and in accordance with the process being run by Department of Disinvestment & Public Asset Management (DIPAM)", Tata Steel had informed in a media release.

With this acquisition, the steel maker's intended not only to restart the one million tons per annum steel plant expeditiously but to also work simultaneously to expand the capacity by building a 4.5 million tons per annum state-of-the-art long products complex in the next few years, and further expand it to 10 million tons per annum by 2030.

Tata Steel is among the most geographically diversified steel producers in the world and is one of the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum and has operations and commercial presence across the world.

The company reported a consolidated net loss of Rs 2,502 crore in Q3 FY23 as against a net profit of Rs 9,598 crore in Q3 FY22. Total revenue from operations during the quarter amounted to Rs 57,084 crore, down 6% YoY.

Shares of Tata Steel were up 0.22% to Rs 111.40 on the BSE.

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