T V Narendran, CEO and managing director of Tata Steel said that the merger of 7 subsidiary companies with Tata Steel is expected to be completed in the 2023-24 fiscal year.
Tata Steel Limited, a member of the Tata Group, is a Mumbai-based Indian multinational steel manufacturer with its primary production facility in Jamshedpur, Jharkhand. With an annual capacity of 13 million tonnes, it is the second-largest steel company in India in terms of domestic production, after the Steel Authority of India Ltd. (SAIL).
Tata Steel’s board approved a plan in September 2022 to merge six subsidiaries into the company to improve synergies, efficiency, and cost reduction. When asked about the merger timeline, the CEO stated that they had previously announced the merger of six companies and had recently announced the merger of Angul Energy.
According to CEO, the merger’s completion is subject to regulatory processes, including NCLT clearances. After this, the process is expected to be concluded in the following financial year.
Merging Entities
Apart from Angul Energy, the company is also planning to merge Tata Steel Long Products (TSPL), The Tinplate Company of India, Tata Metaliks, TRF, Indian Steel & Wire Products, and Tata Steel Mining and S&T Mining Company with Tata Steel.
Mr. Narendran stated that there are no immediate plans to merge the recently acquired NINL into Tata Steel. Neelachal Ispat Nigam Limited (NINL) is a joint venture of four central public sector companies, including MMTC, NMDC, BHEL, and MECON, and two entities of the Odisha government, OMC and IPICOL. Due to losses, the plant has been closed since March 2020. NINL also operates a captive power plant to meet internal power requirements and an air separation unit for producing oxygen, nitrogen, and argon.
NINL Merger
According to the terms of the purchase with the government, the company has committed to operating the new asset as a separate legal entity for three years. After three years, Tata Steel will decide what is best for Neelachal Ispat Nigam Limited. Furthermore, Tata Steel plans to focus on completing the merger of these seven entities before considering the merger of other subsidiary companies.
Tata Steel Q3 performance
According to a regulatory filing, Tata Steel recorded a consolidated net loss of Rs 2,501 crore in the third quarter of the financial year due to increased expenses. In comparison, the company had earned a net profit of Rs 9,598 crore in the same period the previous year.
Tata Steel’s consolidated total income decreased to Rs 57,354 crore in the October-December quarter from Rs 60,842.72 crore in the previous year. The company’s expenses increased to Rs 57,172.02 crore in the quarter under review from Rs 48,666.02 crore in the last year. Additionally, the company reported that its current debt level is at Rs 71,706 crore in a separate statement.
