IMFA acquires Tata Steel's ferro chrome plant at Kalinganagar

Indian Metals & Ferro Alloys Ltd (IMFA; estd 1961), the country's leading fully integrated producer of ferro alloys, today announced the signing of definitive agreements to acquire Tata Steel Limited's (TSL) ferro chrome plant in Kalinganagar, Odisha. The asset transfer agreement will add 99 MVA furnace capacity (66 MVA existing and 33 MVA under construction) for a base purchase consideration of Rs 610 crores, making IMFA the country's largest producer and 6th largest globally with total capacity in excess of 0.5 million tonnes.

Spread across 115 acres in Kalinganagar, the facility being acquired consists of four furnaces capable of producing 100,000 tpa annually which will further increase to 150,000 tpa once the fifth furnace is commissioned. It's proximity to the company's captive chrome ore mines and the upcoming greenfield expansion will lead to significant costs savings and operational synergies.

Subject to the satisfaction of agreed conditions and requisite approvals, the transaction is expected to close in 3 months.

Commenting on the acquisition Mr Subhrakant Panda, Managing Director, IMFA said: "I am delighted to announce this transformational acquisition which will fast track our expansion plans. Along with our ongoing greenfield expansion, it will take total installed capacity beyond 0.5 million tonnes enabling us to increase our market share with a particular focus on domestic sales at a time when demand for ferro chrome is increasing due to India's rapid economic growth."

Mr Panda added: "We are committed to creating value for stakeholders and, building on the strong foundation of a fully integrated business model, will work to realise cost savings and operational synergies which will have a positive impact on the bottom line. Further, the acquisition is being funded from internal accruals which speaks to the strength of the Balance Sheet."

Shares of Indian Metals & Ferro Alloys Limited was last trading in BSE at Rs. 1230.50 as compared to the previous close of Rs. 1208.45. The total number of shares traded during the day was 29610 in over 3079 trades.

The stock hit an intraday high of Rs. 1275.00 and intraday low of 1178.90. The net turnover during the day was Rs. 36601938.00.

Source : Equity Bulls

Keywords

IndianMetalsandFerroAlloys INE919H01018 IMFA Acquisition TataSteel FerroChromePlant Kalinganagar