Nithia Capital plans 6 mt steel capacity in India, IPO on the cards

The UK-based firm eyes Rs 6,000 crore investment to expand Evonith Steel's capacity and explore acquisitions, with a public issue planned in 18-24 months

Nithia Capital, the UK-based global advisory and investment firm, is planning six-million-tonne steel capacity in India through a mix of organic and inorganic opportunities. The firm is also considering an initial public offering (IPO) as part of its funding strategy for expansion.

 

Nithia’s entry into the metals and mining space in India is anchored through its investment in the Wardha steel complex in Maharashtra under the Evonith Steel umbrella, comprising Evonith Metallics Limited (formerly Uttam Galva Metallics Ltd) and Evonith Value Steel Limited (formerly Uttam Value Steels Ltd).

 

The companies were acquired in 2020 under the Insolvency and Bankruptcy Code (IBC).

 

Evonith expansion and funding plans

 

Jai Saraf, founder and chairman of Nithia Capital, said the major expansion under Evonith — from 1.4 million tonnes (mt) to 3.5 mt — would take about three years. The total capital expenditure is estimated between Rs 5,500 crore and Rs 6,000 crore, partly funded from internal accruals.

 

“We are also planning to do an IPO in the next 18 to 24 months. And the balance investment will be funded through debt,” he added.

 

Nithia plans to bring Evonith Metallics Limited (EML) and Evonith Value Steel Limited (EVSL) under one umbrella, which will then go to market.

 

Capacity ramp-up and near-term projects

 

At present, the finished steel capacity is about 800,000 tonnes. By December, it is expected to increase to 1.1 mt with the addition of a ductile iron pipe project. By the end of the next financial year, the capacity will rise to 1.4 mt.

 

While Evonith is strategising to reach 3.5 mt capacity, there are also plans to add 2.5 mt through acquisitions. “Over the next three to five years, we want to be a 6 mt player in India,” said Saraf.

 

Acquisitions and strategic positioning

 

Nithia Capital and Evonith Holdings Pte Ltd recently completed the acquisition of Topworth Urja and Metals Limited for a total consideration of Rs 300 crore. Located near Nagpur, Maharashtra, Urja is a 0.2 mtpa long-products steel producer with integrated facilities — from direct reduced iron production to steelmaking and rolling mills.

 

On acquisitions, Saraf said the company remained acquisitive and was always on the lookout for suitable assets.

 

India’s growing importance in global steel

 

He said India had emerged as the epicentre of the global steel industry, growing faster than anywhere else. “We want to play a small role in India’s steel growth story,” Saraf said.

 

However, he added that India was becoming an easy target for steel dumping. “China is producing 1.2 billion tonnes of steel; they are exporting 120 mt, and the United States has shut the door on them. So, India is becoming an easy target,” he noted.