Tata Steel, one of India’s leading steel producers, recently announced its acquisition of shares worth ₹300 crore in Neelachal Ispat Nigam Ltd (NINL), an indirect subsidiary of the company. The acquisition, which took place on February 21, 2023, involved the purchase of 4,68,75,000 equity shares of Rs 10/- each at a premium of Rs 54/- per share.
NINL was incorporated on March 27, 1982 to set up an integrated steel plant to undertake manufacturing and sale of steel products. The company initially set up a 1.1 MTPA blast furnace in 2002 to produce pig iron. After this, the company commissioned other supporting facilities like a sinter plant, a power plant, and a sinter plant. Currently NINL has a 1.1 MTPA integrated iron and steel plant at Kalinganagar Odisha with an iron ore mine with a reserve of 90 MT.
The acquisition is the first tranche of Tata Steel’s investment in NINL, which is expected to aid the latter in meeting its working capital and capital expenditure requirements, including the start-up of an iron and steel plant at Kalinganagar. The funding will also be utilized for the repayment/prepayment of liabilities and other general corporate purposes.
NINL is an unlisted indirect subsidiary of Tata Steel that operates an integrated iron and steel plant in Kalinganagar, Odisha. The plant has a capacity of 1.1 million tonnes per annum and produces a wide range of products, including pig iron, billets, and TMT bars.
Tata Steel’s investment in NINL is expected to strengthen the latter’s position in the Indian steel market, which has been witnessing a surge in demand over the last few years. The acquisition is also expected to help Tata Steel consolidate its position in the market and enhance its product offerings.
The Tata group had completed the acquisition of 93.71 per cent in Nilachal Ispat Nigam Limited (NINL) through its listed subsidiary Tata Steel Long Products in July last year.
Tata Steel Long Products. It was declared the winning bidder for the one million tonne (mt) NINL, an asset owned by central and state public sector undertakings, in a process conducted by the Department of Disinvestment and Public Sector Undertakings. asset Management (DIPAM), for the consideration of 12,100 crores. The company’s stock was down 1.81 percent on 111.15 bse.
Tata Steel has been actively pursuing growth opportunities in the Indian steel market, and the acquisition of NINL shares is a step towards achieving this objective. The company has been investing in technology and innovation to enhance its product quality and cater to the evolving needs of its customers.
The Indian steel industry has been witnessing significant growth in recent years, owing to increased infrastructure development and the growing demand for steel in various sectors, including construction and manufacturing. With its acquisition of NINL shares, Tata Steel is well-positioned to capitalize on this growth and further strengthen its position in the Indian steel market.
Tata Steel’s acquisition of shares worth ₹300 crore in NINL is a strategic move aimed at strengthening its position in the Indian steel market and capitalizing on the growth opportunities in the sector. The investment is expected to benefit both Tata Steel and NINL, and is likely to have a positive impact on the Indian steel industry as a whole.
