Tata Metaliks to spend Rs555cr on capacity expansion; stock up 2%

The company's current production capacity is 2 LTPA of Ductile Iron Pipes (DIP) and 3 LTPA of Pig Iron (PI).

Feb 28, 2019 11:02 IST India Infoline News Service

Tata Metaliks
Tata Metaliks will spend Rs555cr to add ductile iron pipe and hot metal capacity, as per BSE filing. Reacting to this, shares of the company rose 2% on Thursday.

Accordingly, the Board of Directors of the Company considered and approved the capacity expansion of DI Pipe unit from 2.0 LTPA to 4.0 LTPA along with augmentation of the Mini Blast Furnace capacity and installation of a new 15 MW Power Plant.

With this expansion, the product mix of DI pipes would be enhanced up to 1,200mm diameter pipes.

“The Board at its meeting held today, i.e. February 27, 2019, reviewed and discussed the opportunities for growth through capacity expansion at its existing plant in Kharagpur and consequent funding options,” the company said in the filing.

The company's current production capacity is 2 LTPA of Ductile Iron Pipes (DIP) and 3 LTPA of Pig Iron (PI). Presently, DI pipes product range is from 80mm to 800mm diameter.

The company's long-term aspiration is to achieve profitable growth through an increased focus on DIP segments, where the market outlook is attractive.

With this expansion, the product mix of DI Pipes would be enhanced up to 1200 mm diameter pipe, as per BSE filing.

The Board also reviewed the financial strategy of the company and approved the issuance of equity shares and convertible warrants to the promoter, i.e. Tata Steel Limited on a preferential basis, in accordance with applicable laws, regulations, consents, and approvals (as required), the filing added.

Tata Metaliks Ltd is currently at Rs603, up by Rs14.05 or 2.39%, from its previous close of Rs588.95 on the BSE. The scrip opened at Rs600 and has touched a high and low of Rs610.05 and Rs600, respectively. So far, 35,222 (NSE+BSE) shares have been traded on the counter. The current market cap of the company is Rs1,489.45cr.

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