Tata Steel announces 16,000 crore Capex Plans for FY24

Tata Steel announces 16,000 crore Capex Plans for FY24

Tata Steel has announced elaborate capital expenditure plans to the tune of Rs 16,000 crore for its local and global operations. Tata Steel CEO & MD TV Narendran announced capex plans of the company for standalone unit and subsidiaries in India. The company plans to fund its capex with internal accruals. The plan includes expansion of Kalinganagar project and Tata Steel aims to spend nearly Rs 7000 crore on this unit. The capacity of Kalinganagar project will be raised from 3 metric tons to 8 metric tons.

Tata Steel Nederland B.V. will receive nearly Rs 1100 crore for relining of blast furnace and other improvements. Tata Steel is in talks with UK government to decide about the future of the company’s unit. The decarbonization policy of UK government will need modernization of Tata Steel plant in the UK. The Port Talbot plant must transition to alternative green technologies and Tata Steel is seeking help from UK government.

In July 2022, Tata Steel had planned capex of 12,000 crore out of which Rs 8,500 crore were to be spent on Indian operations and Rs 3,500 on European facilities. Prior to making any strategic decisions, the management of Tata Steel UK will thoroughly assess all potential scenarios regarding the future structure of the business. They will also engage in appropriate consultations with relevant stakeholders throughout this process.

Tata Steel officials informed, “Any decision making will also take into account our market, customers, supply chain impacts and safe operating practices for our employees.”

Tata Steel stock has recovered as Indian markets have witnessed strength during the recent months. From 52-week low of Rs 82, the stock is currently trading at Rs 114. Long term outlook for Tata Steel is positive and market experts believe that demand for steel will remain strong. ICICI Direct has BUY Call for Tata Steel with target price of Rs 130. Axis Direct has suggested BUY Rating for Tata Steel with target price of Rs 125.