Tata Steel bulks up for growth without compromising its deleveraging target

The upturn in the steel cycle has allowed it to reconsider overseas asset sales and plan domestic expansion and acquisitions

At the end of January, Sweden’s integrated steel maker SSAB withdrew its “initial interest” offer in Tata Steel’s Netherlands business for “technical reas­o­ns”. The transaction — announced last Nov­e­mber — was meant to accelerate Tata St­e­el’s deleveraging efforts, bringing it closer to its target net debt-EBITDA (earnings before interest, taxes, depreciation and amortisation) ratio of 3x from 3.9x (annualised) in Q2.

Yet, SSAB’s withdrawal did not dismay Tata Steel. The country’s second largest private steelmaker’s results earlier this month showed that net debt fell by Rs 29,390 crore to Rs 75,389 crore in FY21 and net debt-EBITDA improved to 2.44x,