The joint venture with ThyssenKrupp will help Tata Steel cut Rs 19,000-crore debt. Moreover, the new entity is expected to be a dividend paying one. A combination of the two will give Tata Steel enough ammunition to double its capacity in the next five years and take advantage of the "special situation" arising out of the NCLT-led auction of stressed steel assets, Koushik Chatterjee, the group executive director (finance, corporate & Europe), told Sambit Saha of The Telegraph.

Q: The company disclosed at an analyst call that it would double capacity in India in five years. Is the entire 14-million-tonne capacity coming up at Kalinganagar? If not, what is the other location?

A: We have disclosed our intent to double our capacity in India very aggressively. This will be pursued through a combination of organic and inorganic growth. We have been working on enhancing the capacity at Kalinganagar after completing phase 1 of the project last year. We have also been evaluating the potential to expand Jamshedpur incrementally.

On the inorganic side, we are closely following the developments in the insolvency resolution process under the bankruptcy code and will look at opportunities that fit into our strategy and the value proposition the assets provide.

Q: How much investment is being planned to double the capacity and how will this be funded?

A: The brownfield or organic growth will be very competitive from a capex spend benchmark as Kalinganagar already has some enabling facilities, including a hot strip mill which has an installed capacity of 5.5 million tonnes. Hence, the capex efficiency for the second phase will be high. There are similar capex optimisation opportunities in Jamshedpur.

For the inorganic options, the cost of the acquisition will depend on the individual assets and businesses that are being pursued.

We will fund the growth through a combination of debt and equity with appropriate structures that ensure that the balance sheet is robust and financially stable.

Q: The net debt on a consolidated basis stood at a little over Rs 71,000 crore as on Q1 of 2017-18. How much of that will be transferred to the books of the new joint venture (indicative)?

A: Of Tata Steel's total consolidated debt, around 2.5 billion euros (Rs 19,000 crore) will be transferred to the joint venture company Thyssenkrupp Tata Steel upon closing of the transaction.

Q: What happens to the rest of the debt? Is Tata Steel going to carry the entire burden?

A: The debt on Tata Steel's standalone balance sheet will continue to be serviced by the underlying business of the company. The capital structure of the joint venture is being designed with due care to ensure that the balance sheet of the venture is sustainable and the business can create value to the shareholders.

We also expect the joint venture to be a dividend paying company after considering its own business requirements. We will restructure the balance debt that is not transferred to ensure it is well termed out in suitable instruments and backed by underlying assets and cash flows.

We will also look at appropriate capitalisation options based on the growth strategy of the company.

Q: After the acquisition of Corus, Tata Steel had focused more on greenfield development. Will the next phase of development again include acquisitions?

A: In the last decade, Tata Steel has grown its capacity to 13 million tonnes per annum from about 4 million tonnes through a combination of brownfield and greenfield investments.

The company has very attractive brownfield options for growth. We will also look at acquisitions in India as this is a special situation arising due to the implementation of the bankruptcy code. If the right assets present themselves, we will look at them.

It's not so much of one or the other but a combination of both options of growth, depending on the fit to the strategy.

Q: Is Tata Steel going to bid for any of the stressed steel asset put up for auction by the NCLT? Is it going to put up a proposal for Monnet Ispat for which bids closed on Monday?

A: I can't comment on any specific case as these are sensitive matters.