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Shyam Metalics and Energy Ltd on Tuesday informed that it is entering the stainless steel business by acquiring Mittal Corp Ltd in a resolution led by National Companies Limited Tribunal (NCLT). The company plans to invest ₹7,500 crore over the next 4-5 years with an objective to scale up the metal business, according to Shyam Metalics vice-chairman and managing director Brij Bhusan Agarwal.
“Mittal Corp’s acquisition cost is about ₹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 defense materials,” Agarwal said.
The promoters of the company need to dilute their current holding of 88 percent in Shyam Metalics by at least 13 percent within the next 18 months, Agarwal added, quoting the rules of the Securities Exchange Board of India (SEBI).
According to the Vice-Chairman and MD, the process of dilution will depend on the market but is likely to begin in the next 6-9 months.
The stake dilution will be from a combination of the issue of fresh equity shares and an offer sale which will raise the company’s integrated capacity from 8.8 million tonnes to 14.4 million tonnes by 2025, the company said.
A senior official of the company claimed that the saleable steel capacity of the company is expected to reach 3.6 million tonnes by 2025, from the current 2.1 million tonnes.
“In the last two years, we have invested ₹2,400 crore in the company. We had announced a Capex roadmap of ₹3,950 crore but now we have revised the investment horizon for the next 4-5 years to a total of ₹10,000 crore to meet organic and inorganic growth plans,” he said.
Agarwal further informed that they expect the revenue of the company to touch Rs. 25,000 crores by 2025 from current levels of ₹10,300 crore.
Out of the fresh investments of Rs. 7,500 crores, the company plans to invest around Rs. 5,000 crores into its main West Bengal-based plant at Jamuria near Asansol.
With inputs from PTI
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
