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'Equity inflow from rights issue to firm Tata Steel's books'

Press Trust of India  |  New Delhi 

Tata Steel's improved financial performance along with inflow from a planned rights issue may help strengthen its even as it aims to expand capacity in India, says Ratings.

However, Ltd's (TSL) rating remains on 'Rating Watch Evolving' as the agency awaits details on the JV with Thyssenkrupp AG, Germany, following the signing of definitive agreements.

"TSL's improved EBITDA so far in 2017-18 and inflow from a planned rights issue should enable the company to deleverage and strengthen its even as it aims to expand capacity in India," Ratings said.

The company's consolidated EBITDA jumped 54 per cent year-on-year in the first nine months of 2017-18, with Indian operations accounting for more than 60 per cent of the incremental EBITDA, it said.

TSL plans to hold a Rs 128 billion rights issue of ordinary shares from February 14-28, 2018, it added.

in have also moved in tandem with the increase in international over April-December, supported by steady domestic demand growth.

in have increased to USD 650/tonne, from around USD 450/tonne in April 2017, driven by the improved balance in demand and supply in the world's largest market and an increase in raw material costs, it said.

In India, TSL benefited from 18 per cent increase in in April-December as its plant in Kalinganagar ramped up output, and a 22 per cent improvement in EBITDA per tonne.

Healthy and increasing volumes helped reported EBITDA per tonne to continue to increase to around Rs 14,100/tonne in third quarter from Rs 10,600/tonne in first quarter in

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 14 2018. 16:25 IST