Tata Steel Group has completed the Rs 12,100- crore acquisition of Neelachal Ispat Nigam Ltd (NINL) from a clutch of public sector undertakings, deepening its presence in India’s burgeoning construction and infrastructure sector.

The transaction will give Tata Steel access to 2,500 acres of land and a captive iron ore mine with reserves of 90 million tonnes (mt), apart from a 1.1mt long steel mill located next to its existing plant at Kalinganagar, Odisha.

The company said it plans to restart the unit expeditiously and simultaneously work on expanding the capacity to 4.5mt in the next few years and to 10mt by 2030. The location provides synergies of shared infrastructure, resources, management and an opportunity to build a dedicated and sustainable long products complex, it added.

The acquisition, the second-largest by TSL in India after Bhushan Steel, involves a subscription of 48.43 crore shares for Rs 3,100 crore and 45.6 crore non-convertible redeemable preference shares for Rs 4,506.54 crore, which will be utilised by NINL to pay off its liabilities.

Moreover, the deal also includes the acquisition of 69.4 crore shares from central public sector units such as MMTC, NMDC, Mecon, BHEL and state PSUs Industrial Promotion and Investment Corporation of Odisha Ltd and Odisha Mining Corporation Ltd for the balance Rs 4,400 crore.

MMTC and NMDC were the two biggest shareholders, accounting for 49.78 per cent and 10.10 per cent stake, respectively, of NINL, and hence they would profit most from TSL’s acquisition.

Tata Steel Long Products Ltd, a step-down subsidiary of TSL, was chosen as the successful bidder for NINL through a two-stage auction process carried out by the department of investment and public asset management (DIPAM) under the Union ministry of finance on January 31, 2022. Monday marked the culmination of the transaction, allowing TSL to take control of the company.

Commenting on the completion of the deal, T.V. Narendran, CEO and managing director of TSL, said the acquisition of NINL is a ‘historic achievement’ and a ‘significant milestone’ towards building a dedicated long products facility for Tata Steel Group.

“It will be Tata Steel’s endeavour to enable a swift transformation of NINL into a state-of-the-art, competitive and sustainable enterprise,” Narendran added.

The long products segment — bars, rods, wires among others— is poised to witness significant growth as the country continues to invest in building infrastructure, along with the pick-up in the retail housing segment in semi-urban India.

Tata Steel plans to leverage its capability in the long products business using its strong brand equity, particularly in the retail construction segment, and its extensive, pan-India retail and distribution network.

Tata Steel had earlier announced its ambition to increase its capacity to 40 million tonnes per annum by 2030 in India, and the NINL acquisition strengthens this growth plan.