Nava discontinues conversion agreement with Tata Steel Mining; stock slumps ~2%

24 Aug 2022 , 12:53 PM

Nava Limited’s counter was trading under pressure today as the company announced to discontinue the Conversion of High Carbon Ferro Chrome (HCFC) for Tata Steel Mining Limited (TSML).

At around 12.53 PM, Nava’s stock was trading at Rs248.60, down by 1.87% against the previous close of Rs253.35 on NSE. In today’s trade so far, it touched intraday high and low of Rs257 and Rs245.65 respectively.

The company stated that earlier, it has entered into a subsisting Conversion Agreement with TSML, a Tata company, for the production of High Carbon Ferro Chrome (HCFC) in its Odisha Works. The agreement is valid up to March 2025.

However, technical issues encountered by the company in the production of HCFC for TSML impact the Plant’s productivity parameters. The company has, therefore, decided to discontinue the conversion of HCFC for TSML at the end of October 2022.

In November 2022, the Company will perform scheduled maintenance on the Odisha smelters and will shift to manganese alloy manufacturing at Odisha Works.

The Company has prepared for this extra production in Odisha, in addition to that in Telangana, for a total rated capacity of 1,80,000 MT of Manganese Alloys per year.

The company believes that this transition would offer greater economies of scale and a larger market share in the manganese alloys area.