The Cabinet Committee on Economic Affairs comprising of Union Minister Nitin Gadkari, Nirmala Sitharaman and Piyush Goel, has approved the bid of Tata Steel Long Products Limited to acquire majority stake (93.71%) in Neelachal Ispat Nigam Ltd (NINL).
Tata Steel Long Products's bid that quoted an enterprise value of Rs. 12,100 crore was approved by the cabinet committee. Tata Steel outbid JSW Steel Limited and a consortium of Jindal Steel & Power Limited and Nalwa Steel and Power Ltd.
"On the request of the Boards of selling shareholder PSEs and on concurrence by the Govt of Odisha, CCEA ‘in-principle’ approved strategic disinvestment of NINL on 8.1.2020, and authorised Department of Disinvestment & Public Asset Management to undertake the transaction," read an official release.
Neelachal Ispat Nigam Ltd (NINL) has an integrated steel plant with a capacity of 1.1 MT, at Kalinganagar, Odisha. Set up in 1982 to promote industrialisation in the state of Odisha, the company has been underperforming for many years and running in huge losses. The steel plant ceased operating in March 2021.
NINL is a joint venture of 4 central public sector undertakings - Minerals and Metals Trading Corporation (MMTC), NMDC, BHEL, MECON- and 2 two Odisha government-owned undertakings OMC and IPICOL. The central and state PSU together held 93% stake in the company.
Tata Steel will get the mining rights and leasehold land spread over 2,500 acres. Given that Tata Steel has a significant presence in Odisha where it operates a 3mt plant at Kalinganagar (and expanding it), the group viewed NINL as a strategic fit to the existing unit, apart from increasing exposure to the long products.
