Tata Steel to raise Rs 12,800 crore
Tata Steel kicked off its ambitious brownfield expansion plan when its board on Tuesday approved raising Rs 12,800 crore through a mega rights issue, to fund an additional steel capacity of 5 million tonnes in Odisha.
The total investment of the project is pegged at Rs 23,500 crore, which the company in a statement said will be raised through a combination of debt and equity.
The new capacity will take 48 months (four years) to complete from the date of commencement of construction, the company said.
It marks the first big-ticket CapEx plan by a Tata group company under N Chandrasekaran’s chairmanship, signalling a strong pick up in steel demand at home. It comes close on heels of an announcement by Steel Authorityand the world’s largest steel company ArcelorMittal on plans to set up a 1.5 million tonne (mt) automotive steel joint venture in India at an investment of almost 15,000 crore.
The two-day board meeting which commenced on Monday reviewed the company’s long-term strategy including its organic and inorganic growth opportunities.
The Indian steel industry is showing signs of revival after a particularly tough year of fighting off Chinese imports. The government’s focus on infrastructure and affordable housing has helped stoke demand, while anti-dumping curbs and a favourable approach from the government have provided the enabling policy framework to boostthe sector’s health.