Vedanta begins its assessment of the steel industry for a potential stake sale

3 Jul 2023 , 01:03 AM

Vedanta’s steel and steel raw materials operations are currently the subject of a strategic assessment; any or all of these assets may be sold. Almost five years after purchasing Electrosteel Steels through the insolvency process in 2018, the natural resources giant is seeking to sell the business.

The firm said in a filing on Friday that ‘the review will begin immediately and will evaluate a broad range of options to maximize stakeholder value, including but not limited to a potential strategic sale of some or all of the above-mentioned steel businesses.’

A group of financial investors as well as Tata Steel, JSW Steel, Jindal Steel and Power, and ArcelorMittal Nippon Steel have been contacted by Vedanta regarding the sale of Electrosteel Steels, according to a November story in ET.

Vedanta owns 95.5% of Electrosteel Steel, which had a capacity to produce 2.51 million tonnes of steel and 1.5 million tonnes of steel when it was operational in 2018. Under Vedanta, the business has begun a significant growth in Bokaro and Goa as well as a brand-new facility in Bellary, Karnataka.

Vedanta announced that it has now hired consultants to help with this examination and will make other announcements as needed.

The corporation has operations in the electricity, iron ore, and copper industries in addition to its significant activities in oil and gas, aluminium, and zinc.

In 2022–2023 (April–March), Electrosteel Steel’s overall production increased 2% year over year to 1.28 million tonne, but margins decreased from $74 per tonne to $32 per tonne.

The announcement to examine the company comes at a time when Vedanta Resources, the parent company of Vedanta, has a number of debt commitments.

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