COMPETITIVE · MARKET STRUCTURE · INDIA
IMFA acquisition of Tata Steel’s Odisha ferrochrome plant
Change
Indian Metals & Ferro Alloys (IMFA) has completed its acquisition of Tata Steel’s 115-acre ferrochrome plant at Kalinganagar, Odisha for Rs 707.26 crore, adding 100,000 tpa capacity with a ramp to 150,000 tpa when a fifth furnace is commissioned in ~1 year.
Why it matters
IMFA’s acquisition closes at Rs 707.26 crore (Rs 610 crore base consideration plus GST and net working capital) and is funded entirely from internal accruals, changing its capital structure impact versus debt-funded expansion. The acquired asset includes four operating furnaces with 100,000 tpa capacity, creating an immediate increase in IMFA’s production footprint. A further capacity increase to 150,000 tpa is contingent on commissioning a partially built fifth furnace in approximately one year, setting a clear near-term expansion milestone. For Tata Steel, the transaction represents a completed divestment of this ferrochrome facility and associated production capability.
Implications
- • IMFA’s ferrochrome capacity increases immediately by 100,000 tpa from the acquired furnaces.
- • Additional 50,000 tpa capacity is tied to fifth-furnace commissioning in ~1 year.
- • Tata Steel exits ownership/control of the Kalinganagar ferrochrome plant and output.
- • Deal funded from internal accruals, avoiding new external financing for IMFA.
Who is affected
- • Indian Metals & Ferro Alloys (IMFA) management and shareholders
- • Tata Steel management and shareholders
- • Ferrochrome buyers and industrial customers reliant on this plant’s output
- • Suppliers and contractors supporting furnace operations/commissioning at Kalinganagar
Source
Topics
Business & Markets Mergers & Acquisitions Manufacturing Science & Research Materials Science