Shyam Metalics and Energy Ltd on Tuesday said it has forayed into the stainless steel business by acquiring Mittal Corp Ltd in an NCLT-led resolution process.
The company will invest about Rs 7,500 crore over the next 4-5 years to scale up its metal business, Shyam Metalics vice-chairman and managing director Brij Bhusan Agarwal said.
“Mittal Corp’s acquisition cost is about Rs 450 crore, and we outbid Jindal Stainless, the competitor for the sick asset put under the NCLT resolution process. The acquisition will enable us to foray into stainless steel and special products, such as defence materials,” he said.
To meet market regulator SEBI’s norm, the promoters need to dilute their current holding of 88 per cent in Shyam Metalics by at least 13 per cent within the next 18 months, Agarwal said.
The process of dilution will depend on the market situation but is likely to begin in the next 6-9 months.
The company said that stake dilution will be from a combination of a fresh equity issue and an offer for sale which will fuel the company’s integrated capacity from 8.8 million tonnes to 14.4 million tonnes by 2025.
The saleable steel capacity of the company will go up to 3.6 million tonnes from 2.1 million tonnes by 2025, a senior company official said.
“In the last two years, we have invested Rs 2,400 crore in the company. We had announced a capex roadmap of Rs 3,950 crore but now we have revised the investment horizon for the next 4-5 years to a total of Rs 10,000 crore to meet organic and inorganic growth plans,” he said.
The total revenue will touch Rs 25,000 crore by 2025 from about Rs 10,300 crore in FY’22 fueled by expansion and new businesses, Agarwal said.
The Kolkata-based steel company said that out of the fresh proposed investment of Rs 7,500 crore, about Rs 5,000 crore will be channelised into its main West Bengal-based plant at Jamuria near Asansol.
The company also has a plant in Odisha and was contemplating a beneficiation plant there to reduce cost and raw material security.
The company in 2021 took over an aluminium foil plant in Giridih. It took over sick steel maker Ramsarup Industries in an NCLT-led resolution.
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