Tata Steel Long to acquire Neelachal Ispat Nigam for Rs 12,100 crore

Tata Steel Long Products (TSLPL) aid that it has been identified as the winner of the bidding process to acquire a 93.71% equity stake in Neelachal Ispat Nigam (NINL).

January 31, 2022 5:32 IST | capital market

The companys bid has been declared successful in accordance with the process being run by Department of Disinvestment & Public Asset Management (DIPAM), Government of India.

NINL represents a critical and strategic acquisition for TSLPL with around one million tons per annum of steelmaking capacity, 2500 acres of land for future growth and iron ore reserves of around 100 million tons. NINL will become the core of TSLPLs growth aspirations, as it is intended to not only restart the one million ton steel plant expeditiously but also begin work immediately to build a 4.5 million ton per annum state of the art long products complex in the next few years, and further expand it to 10 million ton per annum by around 2030.

As part of the larger Tata Steel ecosystem, the location of the NINL complex presents opportunities to leverage synergies with existing infrastructure, bring to bear best operating practices and expertise in mining as well as project management to create significant value. TSLPL has a clear strategy to build its business across long products, including branded products, downstream solutions and speciality high-end products.

The total consideration of Rs 12,100 crore reflects the enterprise value (including all recorded liabilities) as part of the acquisition of 93.71% equity stake in NINL.

The transaction is scheduled for closure within the next couple of months as per the process timelines announced by DIPAM, Government of India.

Tata Steel Long Products is one of Indias largest merchant sponge iron manufacturers. The company is engaged in the production of sponge iron by direct reduction method of iron ore and power generation from waste heat.

The companys net profit declined 65.8% to Rs 103.8 crore in Q3 FY22 from Rs 304.3 crore posted in Q3 FY21. Revenue from operations increased by nearly 23% to Rs 1677.22 crore in Q3 FY22 from Rs 1,364.17 crore posted in Q3 FY21.

The scrip surged 6.19% to end at Rs 768.85 on the BSE. The stock hit a high of Rs 837.25 and a low of Rs 726.05 during the day.

On the BSE, 79,894 shares were traded in the counter so far compared with average daily volumes of 13,454 shares in the past two weeks.

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