India’s Tata Steel Limited is investing approximately $795 million in the equity of its subsidiary Neelachal Ispat Nigam Limited (NINL) to implement its long products expansion plan, SteelOrbis reports.
The investment is planned to be made over two years, and is subject to shareholder approval. The company is located in proximity to Tata Steel’s steel plant in Kalinganagar, Odisha, where a project to increase production capacity by 5 million tons per year is underway. While the expansion in Kalinganagar is expected to increase the company’s offer in the flat products segment (hot and cold rolled coils), NINL will focus on long products (wire, bars and wire rod).
Tata Steel acquired NINL in early 2022 through a privatization process. After acquiring the state-owned enterprise, Tata focused on restarting the plant and bringing it to its existing steelmaking capacity of 1.1 million tons per year. In the next phase, the company plans to expand NINL’s capacity by another 4 million tons per year.
In addition, NINL also has its own 62 MW power plant and 90 million tons of iron ore mines.
Last summer, Tata Steel increased its projected capital expenditure to Rs 16,000 crore ($1.95 billion) for the 2023/2024 financial year. The projected capex is to be financed through internal accruals over the entire period, with Rs 10 thousand crore (over $1.2 billion) earmarked for Tata Steel’s standalone operations. Around 70% of this amount will be attributed to the Kalinangarh plant capacity expansion project.
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