Tata Steel to acquire 93.7% stake in Neelachal Ispat Nigam for Rs 12,100cr
Tata Steel said that its subsidiary Tata Steel Long Products has prevailed in a bidding process to acquire a stake of 93.71% in Neelachal Ispat Nigam Limited (NINL) for INR 12,100 crores.
The auction process is being carried out by the Indian government’s Department of Disinvestment & Public Asset Management (DIPAM).
Neelachal Ispat Nigam has a 1.1-million-ton integrated iron and steel plant in Kalinganagar, Odisha.
Tata Steel said that while its growth in flat products will be driven by the Kalinganagar and Meramandalli sites in Odisha in addition to the existing capacity in Jamshedpur, Neelachal Ispat Nigam will serve as its hub for long products manufacturing in the future.
Tata Steel to acquire 93.7% stake in Neelachal Ispat Nigam for Rs 12,100cr. Photo courtesy of Tata Steel.
The Indian steelmaker said that the Neelachal Ispat Nigam plant is located near its Kalinganagar steel plant, thereby making it a strategic acquisition by adding nearly a million tons per annum of steel-making capacity, 2,500 acres of land for growth in the future as well as nearly 100 million tons of iron ore reserves.
By acquiring the stake in Neelachal Ispat Nigam, Tata Steel will get the significant scope to expeditiously restart the one million ton per annum steel plant apart from starting work immediately to construct a 4.5 million ton per annum long products complex in the coming few years, and further ramp it up it to 10 million ton per annum by around 2030.
Tata Steel stated: “The long products segment in India is poised to witness significant growth as India builds its infrastructure and industrialisation through the Atmanirbhar Bharat Program of the Government. Tata Steel will leverage its capability in the long products business using its strong brand equity, particularly in the retail construction segment, and its extensive, pan-India retail and distribution network to drive scale and profitability in Long Products.
“The acquisition will also facilitate growth in downstream solutions and specialty high end products catering to customers in the construction, heavy engineering and automotive space.”
The deal is slated to be closed within the next two months as per the process timelines announced by DIPAM.