Tata Steel adding capacity worth Rs. 5,700cr

Unfolding its expansion plans for the fiscal, the Tata Steel, in a recent move has decided to invest Rs. 5,700 crore on the innumerable domestic and overseas expansion plans including 10 million per annum capacity addition from the current 6.8 million at the Jamshedpur steel plant by the middle of the next year.

Elaborating on the newly carved out expansion strategies of the company the Chief Financial Officer, Koushik Chatterjee in a statement said that the Tata Steel raising annual iron ore production by 55 per cent to 17 million tons in India over the next two years. The expansion is expected to cost Rs. 1,100 crore. The step is aimed at insulating its Jamshedpur plant from fluctuating raw material prices. About the overseas projects, he added that the company plans to develop iron ore and coal mines in Canada and Mozambique through two joint ventures besides, developing a mini blast furnace under its Thailand subsidiary.

Outlining the financial angle he said that the company will come out with a rights issue, through some of the money raised will be spend towards repaying part of its debt as the company and its European subsidiary had a total debt of Rs. 26,946 crore at the end of March this year giving the company a debt equity ratio of 1:78. Most of the debt is the result of the acquisition of the Anglo Dutch steel maker Corus. In case the company comes across opportunities to put more equity capital in our growth projects with very significant returns it will go ahead at a appropriate time as it will ease some amount of internal cash towards the repayment, he claimed.