Tata Steel Long Products (TSLP) rose 2.47% to Rs 586.65 after the company completed the acquisition of stake in Neelachal Ispat Nigam Limited (NINL).
TSLP has completed the acquisition of 93.71% in NINL from MMTC, NMDC, MECON, Bharat Heavy Electricals, Industrial Promotion and Investment Corporation of Odisha, Odisha Mining Corporation, President of India and Government of Odisha for an aggregate consideration of Rs 12,100 crore.The company stated that the acquisition has been completed as per the terms and conditions of the share sale and purchase agreement entered on 10 March 2022 and in accordance with the process being run by Department of Disinvestment & Public Asset Management (DIPAM).
NINL is a strategic acquisition for Tata Steel as it provides synergies of shared infrastructure, resources, management and an opportunity to build a dedicated and sustainable long products complex. It is located in the close proximity to Tata Steel's facility at Kalinganagar, Odisha.
The company said that it will not only restart the one million tons per annum steel plant but to also work simultaneously to expand the capacity by building a 4.5 million tons per annum long products complex in the next few years, and further expand it to 10 million tons per annum by the year 2030.
Tata Steel will leverage its capability in the long products business using its brand equity, particularly in the retail construction segment, and its pan-India retail and distribution network to drive scale in long products.
Tata Steel had earlier announced its ambition to increase its capacity to 40 million tons per annum by 2030 in India, and the NINL acquisition strengthens this growth plan over the next decade while providing the enablers to even go beyond the 40 million tons target, said the company.
T. V. Narendran, CEO and managing director of Tata Steel and chairman of Tata Steel Long Products said, The completion of the transaction is a testimony to Government of India's focus on its disinvestment programme. The acquisition also reflects Tata Steel's commitment to the State of Odisha and the communities around its operations. We are delighted to welcome NINL and its employees to our family. We look forward to the support and commitment of all the stakeholders and employees. It will be Tata Steel's endeavour to enable a swift transformation of NINL into a state-of-the-art, competitive and sustainable enterprise.
Neelachal Ispat Nigam Limited has a 1.1 mtpa integrated iron and steel plant at Kalinganagar Odisha, along with iron ore mines with a reserve of 90 MT. The company reported a revenue of Rs 24 crore during the financial year ended 31 March 2021.
Tata Steel Long Products is one of India's largest integrated special steel and merchant direct reduced iron (sponge iron) player. The company reported 82.5% drop in net profit to Rs 59.62 crore on a 16.3% increase in net sales to Rs 1,799.40 crore in Q4 FY22 over Q4 FY21.
Meanwhile, shares of Tata Steel rose 1.92% to Rs 870.95 on the BSE.
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