UK-based investment firm Nithia Capital’s portfolio company, Evonith Steel Group, is targeting a four-fold increase in production capacity to 6 million tonnes through a combination of brownfield expansion and strategic acquisitions, as it positions itself to capitalise on India’s accelerating demand for steel.
Evonith, which came to existence five years back by acquisitions of Uttam Galva Metaliks and Uttam Value Steels through insolvency process, also plans to tap the primary market to raise about ₹2,000 crore to part-finance the expansion plan.
“Our immediate goal is to expand the current facility from 1.4mt to 3.5mt with an investment of ₹5,500–6,000 crore over the next 2.5 to 3 years. Beyond that, we plan to grow to 6mt through inorganic expansion — primarily acquisitions and scaling them up,” Jai Saraf, founder and CEO of Nithia Capital, said in an interview with The Telegraph.
Saraf, who went to St. Xaviers college on Park Street in Calcutta, said steel assets in the mineral rich eastern region would be on his radar for acquisition. These regions provide proximity to both raw materials and end markets, which is critical given India’s high logistics costs, he argued.
In the recent past, Nithia is learnt to have looked at Electrosteel Steels, which Vedanta had acquired via IBC. However, the sale process of the Bokaro, Jharkhand-based steel unit did not make headway.
Saraf, who spent the formative years of his career working for steel czar Lakshmi Niwas Mittal before setting up Nithia in 2010, outlined how Evonith was turned around after its acquisition.
“Historically, they (Uttam twins) produced about 0.5 million tonnes per annum. Today, we’re at 1.4 million tonnes, having invested ₹1,500 crore in modernisation, debottlenecking and equipment health,” Saraf said.
The Wadhwa, Maharashtra-based units will be expanded to 3.5mt for which environment clearance is being sought. The unit will mostly produce flat steels.
In FY26, Evonith is likely to post revenue of around ₹7,000 crore compared with around ₹5,000 crore in FY25. The current EBITDA is about ₹1,200 crore and will likely reach ₹1,500 crore next year, Saraf said. Two days back, Crisil rated the company’s long-term debt facility as ‘AA-’.