Tata Steel Shares Steel Capacity Growth Plans with Investors
The Telegraph reported that Tata Steel is going to invest INR 10,000-12,000 crore per annum for the next five years to scale up the India business even as it plans reduce leverage by at least USD 1 billion on an annual basis in the next few years. The company wants to blend the urge to grow with the caution of strengthening the balance sheet, taking advantage of the commodity up-cycle which has led to record profits for steelmakers. Much of the cash will be funnelled to Kalinganagar in Odisha, where the company is scaling up capacity to 8 million tonnes from 3 million tonnes to take the India business at 25 million tonnes by the end of fiscal 2024.
The investment numbers do not, take into account potential acquisitions. The company pointed out they would look out for acquisitions to bolster long products capacity and mentioned opportunities that may come up from disinvestment programmes of Neelachal Ispat Nigam Ltd and RINL.
In 2021-22, Tata Steel will step up investment from INR 7,000 crore spent in the last fiscal even as it may reduce gross debt as much as INR 15,000 crore or twice the stated target. In 2020-21, it had brought down gross and net debt by USD 4 billion.