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Indian Metals & Ferro Alloys Ltd (IMFA) has signed definitive agreements to acquire Tata Steel's ferro chrome plant at Kalinganagar, Odisha, for a base consideration of Rs 610 crore.
The acquisition adds 99 MVA furnace capacity - 66 MVA operational and 33 MVA under construction - taking IMFA's total installed capacity beyond 0.5 million tonnes per annum, the company said in a statement.
With this deal, IMFA becomes India's largest and the world's sixth-largest ferro-chrome producer.
Spread across 115 acres, the Kalinganagar facility includes four furnaces capable of producing 100,000 tonnes per annum, expected to rise to 150,000 tonnes once a fifth furnace is commissioned. The plant's proximity to IMFA's captive chrome ore mines is expected to yield cost savings and operational synergies.
The transaction, subject to regulatory approvals, is likely to close within three months.
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Calling the acquisition "transformational," IMFA Managing Director Subhrakant Panda said it would fast-track the company's expansion plans and strengthen its position in the domestic market amid growing demand for ferrochrome. He added that the deal will be funded through internal accruals, underscoring IMFA's financial strength.
The company also reported second-quarter earnings, with net profit declining to Rs 98.77 crore from Rs 125.72 crore a year back.
Subhrakant Panda, Managing Director of IMFA, said: "Ferro Chrome prices moved up noticeably towards the end of the second quarter due to elevated chrome ore costs for non-integrated producers and a sharp cutback in output in South Africa. This is partially reflected in the current results, and we expect to see the full impact in the ongoing quarter with the increase in benchmark as well as higher spot prices.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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