India: Tata Steel Long Products to acquire Neelachal Ispat

The Tata Steel Long Products placed the highest bid, at around INR 12,100 crore, for acquiring Neelachal Ispat Nigam Limited (NINL), SteelMint learnt from sources.

Earlier, names like ArcelorMittal, JSW Steel and Tata Steel were heard to have been shortlisted for the acquisition. Tata Steel had earlier evinced interest in acquiring NINL through the divestment procedure.

Tatas put in the highest bid for 93.71% in NINL which was approved by the Indian government.

Odisha-based NINL is one of the seven Central Public Sector Enterprises (CPSEs) in the steel sector that are up for strategic disinvestment, (along with Vizag-headquartered Rashtriya Ispat Nigam Limited).

Earlier, a senior official in the Department of Investment and Public Asset Management (DIPAM) was heard saying the government was going to close the sale of NINL “in a matter of days”. It was heard that the government was “giving final touches” to the sale of NINL.

On 25 Jan’21, the Union government had invited preliminary bids for the strategic sale of NINL and in Dec’21 had received financial bids for the same. However, the divestment decision had been taken in 2018.

NINL was promoted by four CPSEs — MMTC Ltd, NMDC, BHEL and MECON – and two Odisha government PSUs — Industrial Promotion and Investment Corporation of Orissa Limited (IPICOL) and OMC.

Assets

NINL has assets which would come in handy to its suitor. It owns a 1.1 million tonne (mnt) integrated steel plant at Kalinganagar, in the district of Jajpur, in Odisha.

It owns a captive iron ore mine with an environmental clearance (EC) limit of 2 mtpa. The mine has total reserves of 102 mnt, spread over 871 hectare in the Koira circle. The mine’s date of execution is from 11 January, 2017 till 10 January, 2067. The company had received permission for merchant sale of 1 mnt per annum of its iron ore for two years to augment iron ore production in the state of Odisha and to meet its own expenses.

NINL also has a captive power plant of 55 MW, a sintering unit of 1.71 mtpa, a coke oven unit of 0.87 mtpa and a blast furnace capacity of 1.1 mtpa. It has a billet-making capacity of 0.55 mtpa and pig iron of 0.43 mtpa. It is also India’s largest exporter of pig iron.

However, production at NINL has been stopped since the last couple of years, having incurred huge losses.