Mumbai: Tata Steel Will take control of Nilachal Ispat Nigam (NINL) the government said on Monday after bidding for Rs 12,100 crore including equity and debt. Tata Sons is planning to make Neelachal’s Odisha facility, which is currently closed, the center of its long steel business in the future. Long steel products refer to the rods, rails and bars used in the construction sector.
The deal heats up after Tata Sons acquired Air India from the government through a privatization process. The M&A is in line with Tata Steel’s strategy of doubling the Indian business after selling off some unprofitable overseas ventures. In 2018, it had acquired Bhushan Steel for Rs 35,200 crore, the largest M&A under the chairmanship of Tata Steel N Chandrasekharni (who is also the chairman of Tata Sons) – India’s first consolidation move as part of that strategy.
The government on Monday said it has approved the highest bid of $21 billion Tata Steel Long Products for a 94% stake in loss-making Nilachal at an enterprise value of Rs 12,100 crore. Billionaire industrialist apart from Tata Steel Sajjan Jindal Controlled A conglomerate of JSW Steel and Jindal Steel & Power (owned by the younger brother of the gentleman) Naveen Jindal) and Nalwa Steel & Power submitted financial bids for Nilachal.
Tata Steel will have to pay 10% of the bid amount on signing the share purchase agreement. Neelachal’s debt exceeded Rs 6,600 crore, while its accumulated deficit as on March 31, 2021 stood at Rs 4,228 crore. This is the first instance of privatization of a public sector steel manufacturing enterprise in India.
The deal heats up after Tata Sons acquired Air India from the government through a privatization process. The M&A is in line with Tata Steel’s strategy of doubling the Indian business after selling off some unprofitable overseas ventures. In 2018, it had acquired Bhushan Steel for Rs 35,200 crore, the largest M&A under the chairmanship of Tata Steel N Chandrasekharni (who is also the chairman of Tata Sons) – India’s first consolidation move as part of that strategy.
The government on Monday said it has approved the highest bid of $21 billion Tata Steel Long Products for a 94% stake in loss-making Nilachal at an enterprise value of Rs 12,100 crore. Billionaire industrialist apart from Tata Steel Sajjan Jindal Controlled A conglomerate of JSW Steel and Jindal Steel & Power (owned by the younger brother of the gentleman) Naveen Jindal) and Nalwa Steel & Power submitted financial bids for Nilachal.
Tata Steel will have to pay 10% of the bid amount on signing the share purchase agreement. Neelachal’s debt exceeded Rs 6,600 crore, while its accumulated deficit as on March 31, 2021 stood at Rs 4,228 crore. This is the first instance of privatization of a public sector steel manufacturing enterprise in India.
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