Indian Metals and Ferro Alloys to acquire Tata Steel's ferro alloys plant for ₹610 crore

Shares of Indian Metals and Ferro Alloys Ltd. (IMFA) gained nearly 4% on Tuesday, November 4, after the company said its board of directors has approved the acquisition of Tata Steel's fero alloys plant at Kalinganagar, Odisha. However, the stock gave up those gains soon after to trade in the red.

The acquisition value is worth ₹610 crore in addition to the GST component and the value of net working capital.  The transaction is expected to be completed in three to six months.

IMFA said the acquisition is in line with its strategy to drive the next phase of growth in its ferro alloys business by expanding capacity.

The locational advantage and cost synergies due to proximity to company's captive mines and upcoming greenfield project in Kalinganagar will augment the its ability to cater to new opportunities with a focus on the domestic market, IMFA's statement said added.

IMFA is set to double its ferro chrome capacity with the help of this acquisition. From the current capacity of 2.84 lakh tonne, and the organic expansion of 1 lakh tonne, the total capacity, post expansion would be 5.34 lakh tonne.

The acquisition positive for the IMFA as it gives it scale. Its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for financial year 2025 was ₹531 crore. Chrome Ore being short in supply, locational advantage and cost synergies due to proximity to captive mines are some other advantages.

Shares of IMFA are witnessing choppy moves after the acquisition announcement. The stock currently trades 2.22% higher at ₹1,237. The stock has risen 6.2% in the last one month.

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