Tata Group chairman Natarajan Chandrasekaran pitched for promoting steel export from India and hoped that the government’s measures to tackle inflation would be short-term in nature.

Acknowledging that the domestic steel industry is facing headwinds due to the imposition of duty on exports, Chandrasekaran argued in favour of leveraging India’s competitive advantage as a steel-producing nation.

Speaking at the 115th AGM of Tata Steel, he also informed shareholders that the company would continue to expand capacity while reducing debt by $1 billion a year.

“The steel industry in India is globally competitive and therefore Indian steel companies should be able to expand capacity in value-added steel products for both “make for India” and “make for the world,” Chandrasekaran, who is also the chairman of Tata Steel Ltd, argued.

His comments come a month after the Modi government imposed a 15 per cent duty on the export of steel to control soaring inflation. The decision had a desired effect in the marketplace as steel prices have corrected by 12-15 per cent. However, the move was initially seen as a dampener for private steel makers who had announced ambitious expansion plans, factoring in domestic growth as well as export opportunities.

“This is a defining moment in history where the steel industry can leverage its competitive position and export its products globally to not only earn foreign exchange but also provide opportunities for capital formation in India, provide employment and allow Indian companies to invest in sustainable technology and create value for the long term,” Chandrasekaran pointed out.

Capital structure

The chairman assured the shareholders that the company would continue to deleverage $1 billion or more a year even though reaching debt status is not the goal.

“The main thing is, we have to have the right capital structure,” he said, adding that Tata Steel’s capital structure is ‘very strong’, with debt to EBIDTA or debt to equity ratios prevailing below 1.

However, the deleverage programme would not come at the cost of slowing down expansion. Tata Steel would spend Rs 10,000-12,000 crore annually to expand capacity.

“We definitely want to expand faster and reach our targets of 30-40mt. So, we are not slowing down our expansion plans. We think we have adequate cash flows to be able to support that,” he said.

Tata Motors

Tata Motors will raise prices of commercial vehicles from July 1 due to rising input costs.

In a regulatory filing to the exchanges, the company disclosed that a price increase in the range of 1.5-2.5 per cent will come into effect from July 1 across the range, depending upon individual model and variant.