Tata Steel to acquire 50% stake in Thriveni Pellets for up to ₹636 crore

Tata Steel Ltd on Wednesday (December 10) said its board has approved the acquisition of 50.01% equity stake in Thriveni Pellets Private Ltd (TPPL) from Thriveni Earthmovers Private Ltd (TEMPL) for up to ₹636 crore.

Thriveni Pellets Private holds 100% stake in Brahmani River Pellets Ltd (BRPL), which operates a 4MTPA pellet plant at Jajpur, Odisha, along with a 212-kilometre slurry pipeline. Pre-transaction, 50.01% of TPPL was held by TEMPL, and 49.99% stake was held by Llyods Metals & Energy Ltd (LMEL).

Post-transaction, 50.01% stake in TPPL will be held by Tata Steel, and the balance 49.99% stake will continue to be held by LMEL. Tata Steel acquired 90,06,801 shares of face value ₹10 each, comprising 50.01% equity stake in TPPL from TEMPL.

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The consideration will be paid in cash and is subject to closing adjustments. The transaction is subject to approval from the Competition Commission of India and is expected to be completed within 3-4 months.

TPPL operates in the manufacturing and trading of iron ore pellets. The acquisition aims to secure a pellet-making facility for the supply of iron ore pellets to Tata Steel in India. Tata Steel and TEMPL are not related parties, and promoter or promoter group entities of Tata Steel do not have any interest in TPPL.

The Tata Steel board also affirmed the long-term growth strategy for the India business and accorded in-principle approval for a 4.8MTPA capacity expansion at Neelachal Ispat Nigam Ltd (NINL) in the first phase. It approved funds for design and engineering work to set up a 2.5 million tonne thin slab caster and rolling facility at Tata Steel Meramandali, along with progress on seeking regulatory approvals.

The board approved a plan to set up a 0.7MTPA hot rolled pickling and galvanising line (HRPGL) at the existing cold rolling complex in Tarapur, Maharashtra. Tata Steel signed an MoU with Lloyd Metals & Energy Ltd to partner in iron ore mining, logistics, including slurry pipeline, pellet and steel making.

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The companies will jointly explore operating mining concessions and infrastructure in Gadchiroli, development of a greenfield six million tonne steel capacity by Tata Steel in two phases, and strategic cooperation in integrated steel projects being developed by LMEL, subject to evaluation, due diligence and approvals.

The board reviewed the progress of the revolutionary HIsarna technology trials and approved the commencement of engineering work and the regulatory approval process to set up a demonstration plant of around 1 MTPA capacity in Jamshedpur. Tata Steel owns the global intellectual property rights of the HIsarna process technology.

Shares of Tata Steel Ltd ended at ₹162, up by ₹1.33, or 0.83%, on the BSE today, December 10.

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