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Informist, Thursday, Dec. 11, 2025

 

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--Tata Steel: Engineering work started in Neelachal Ispat expansion phase 1
--CONTEXT: Comments of Tata Steel's management in investor call
--Tata Steel: Biggest capex in latest India capacity add plan likely in NINL
--Tata Steel: 50.01% stake buy in Thriveni Pellets almost at book value
--Tata Steel:Post board's final OK, Neelachal Ispat expansion to take 3-4 yrs
--Tata Steel: Aiming to raise mkt share in India long steel pdts from 10-15%
--Tata Steel: Domestic long steel business not under Chinese imports threat
--Tata Steel:Greenfield steel plant in Maharashtra only if iron ore available
--Tata Steel:Neelachal Ispat phase 2 expansion to also be in long steel pdts

 

By Rajesh Gajra

 

NEW DELHI – The biggest capital expenditure in Tata Steel Ltd.'s latest growth plan for its India operations will go in the expansion of long steel products capacity at its wholly-owned subsidiary Neelachal Ispat Nigam Ltd., the company's management told investors on a conference call Thursday. The board of Tata Steel had Wednesday approved in principle a capacity expansion of 4.8 million tonnes per annum in the first phase, apart from three other expansion projects, a memorandum of understanding with Lloyd Metals and Energy Ltd., and one majority stake purchase in Thriveni Pillets Pvt. Ltd.

 

Phase 1 of Neelachal Ispat's expansion will be finalised by March as the company is sorting out "a few issues", including environment clearances, the management said. "So, the details in terms of the investment amount, etc., we will make by March, but basically, a lot of the engineering work has started," a senior official of the company said. The company will take 3-4 years to complete the Neelachal Ispat expansion, he said.

 

Phase 1 and phase 2 of the expansion will both be in the long products portfolio, the official said. The existing long products unit of Neelachal Ispat is undergoing "some de-bottlenecking" and the company expects to take the subsidiary's total capacity to around 6 million tonnes per annum from the current annual capacity of 1 million tonnes by the end of the first phase, he said.

 

The Neelachal Ispat capacity expansion will cover rebars, coils, and wire rods. This will enhance the company's existing long steel products capacity in India across all factories from around 5.4 million tonnes per annum to over 10 million tonnes per annum, the official said.

 

Long products account for 55-60% of steel demand in India and big steel companies account for less than 50% of the long steel business with the bigger share going to a "large number of small players", he said. Tata Steel aims to tap into the growing demand for long steel products, particularly in downstream segments.

 

Through the Neelachal Ispat expansion project, the company sees an opportunity to raise its market share in long steel products from the current 15-20%. "Longs are also not under so much of imports threat because most of China's (steel) exports are flat products," the management said.

 

On the memorandum of understanding signed with Lloyd Metals, tentatively for partnering in iron ore mining, logistics, including slurry pipeline, and pellet and steel making, the management said the plan to set up a greenfield steel factory in Maharashtra's Gadchiroli district with a capacity of 6 million tonnes per annum will be put in action only if the company is "able to sort out the iron ore issues and get clarity on the supply of the same because it is not close to the sea", the senior official said.

 

The targeted 50.01% stake purchase in Thriveni Pellets is based on the enterprise value being almost the same as the book value of the unit. "For us, that was very important because it reflects the replacement value was much higher... and the day when we complete the acquisition post all the regulatory approvals it (will give) a savings of" around INR 500 million a month, the management said.

 

Thursday, shares of Tata Steel closed 2.6% higher at INR 166.38 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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