Tata Steel announced on Wednesday that it had acquired 300 crore in shares in Neelachal Ispat Nigam Ltd, an indirect subsidiary of the company.
On February 21, 2023, Tata Steel subscribed to 4,68,75,000 equity shares of Rs10 each at a premium of Rs54 per share, for a total investment of Rs300 crore in Neelachal Ispat Nigam Ltd under Tranche 1.
"On February 21, 2023, the Company acquired 4,68,75,000 equity shares of face value of ten rupees each at a premium of 54 rupees per share of NINL for an aggregate value of 300 crore, being Tranche 1 of the investment in the equity shares of NINL," the company stated in its regulatory filing.
The funds will be used to meet NINL's working capital and capex needs, including the start-up of an iron and steel plant in Kalinganagar, the repayment or prepayment of liabilities, and other general corporate purposes.
Tata Steel's stake in Neelachal Ispat Nigam Ltd increased from 1.88 percent to 5.23 percent following the acquisition.
NINL operates a 1.1 MTPA integrated iron and steel plant in Kalinganagar, Odisha, as well as iron ore mines with a 90 MT reserve. In fiscal year 2021-22, it had a revenue of 257.58 crore.
Tata Steel Long Products, a listed step-down subsidiary of Tata Steel, completed the acquisition of 93.71 percent of Neelachal Ispat Nigam Limited (NINL) in July last year.
Tata Steel Long Products was declared the winning bidder in a process run by the Department of Disinvestment & Public Asset Management (DIPAM) for the one million tonne (mt) NINL, an asset owned by central and state public sector undertakings, for a consideration of Rs 12,100 crore.