Tata Steel plans to spend ₹15,000 crore in FY2025 with its Indian business accounting for 75 per cent of the capex planned, the company management told analysts and investors on Tuesday.
The company will use the money in part to complete the 5-million-tonne capacity expansion at Kalinganagar, Odisha, apart from finishing the construction of the scrap-based electric arc furnace of 1 mt capacity in Ludhiana.
The steel maker will also funnel cash to projects aimed at improving asset reliability and performance efficiency in order to bring down cost. However, a distinctive feature of the capex is that it is not directed at new capacity expansion as the majority would be directed at finishing ongoing expansion work.
T.V. Narendran, managing director & CEO of Tata Steel, said the company would get the benefit of the Kalinganagar expansion in FY27 when the entire 5 mt would be available, apart from the Ludhiana EAF. Tata Steel is expected to produce about 1.5 mt additional volume in India in FY26.
The next project which Tata Steel plans to take up is the expansion of Neelachal Ispat Nigam Ltd (NINL), where a long product facility would come up. “We plan to take the project for board approval this year,” Narendran told analysts.
The company has completed the design engineering of the NINL plant, conducted a public hearing to obtain environmental clearance (EC) and applied for EC for expansion up to 9.5 mt.
“Previously, we used to take board clearance and then get down to taking approvals and design drawings. Now, when the board approves, we will be in the position to start construction soon thereafter, thereby having better visibility in project execution,” he said.
Tata Steel plans to build a long products facility at NINL, producing items that go into the construction sector. The first phase is likely to be 4.5 mt. At present, NINL is operating at 1 mt capacity.