The Indian Ferro Alloys market is highly fragmented among a vast number of small, medium, and large-scale manufacturers. Partnerships and strategic acquisitions are two common practices by the leading market players to gain ground over their competitors and are also expected to help the global Ferro Alloy market players to add to their shares.
A consortium comprising of Dubai-based Company United Tradeco together with India-based QVC Exports Pvt. Ltd. has submitted a bid to acquire the assets of Cosmic Ferro Alloys Ltd., under the provisions of the insolvency and bankruptcy code, and according to industry sources are the highest bidder so far and front-runners to get the final nod for acquisition. The Committee of Creditors (CoC) has to finalize the resolution plans and submit to the NCLT bench by 16 July.
Cosmic Ferro Alloy Limited recently hit the road to insolvency. Cosmic Ferro Alloy Limited’s inability to pay its obligation landed it in conflict with its creditors, while National Company Law Tribunal (NCLT) ordered for its bidding resolution.
The list of bidders for the assets of Cosmic Ferro Alloys Limited includes Lalwani Ferro Alloys, Maithan Alloys, and a consortium comprising of QVC Exports Pvt. Ltd. and Dubai-based Company United Tradeco.
Why is the acquisition of Indian Ferro Alloy Unit a smart idea?
Application-wise, around 80% of the Ferro Alloys produced globally is consumed for steel production. An expected increase in usage of steel on the back of rapid urbanization will be key factors driving the demand for Ferro Alloys in India. Ferro Alloys are widely used for various end-use industries, particularly steel production, production of Special alloy steels, wire production, and production of welding electrodes. Iron ore is abundant in India, and the lack of a viable alternative is expected to keep the Ferro Alloys market in good stead in the near future. Moreover, the development of lightweight and high strength steel grades are expected to open new opportunities in the Ferro Alloys market. On the other hand, stringent environmental rules for pollution control in China could lead to firm prices and provide further traction to the Indian Ferro Alloys industry.
The outlook for the Indian steel industry looks promising in the years to come with production estimated to reach 300 million tonnes by 2030, and companies from India and abroad are likely to showcase their interest to invest in Indian units associated with steel production and its intermediaries.
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