BHUBANESWAR: Leading fully-integrated producer of ferro alloys Indian Metals and Ferro Alloys (IMFA) Ltd is all set to acquire Tata Steel Ltd’s ferro chrome plant at Kalinganagar in Jajpur district at `610 crore.
The definitive agreement to acquire the ferro chrome plant was signed between IMFA and Tata Steel Ltd on Tuesday. Once acquired, IMFA will be the country’s largest producer and sixth 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. The plant’s proximity to IMFA’s captive chrome ore mines and the upcoming greenfield expansion will lead to significant cost savings and operational synergies.
According a statement issued by the company, the asset transfer agreement will add 99 MVA furnace capacity (66 MVA existing and 33 MVA under construction). The acquisition process is expected to be completed in three months subject to the satisfaction of agreed conditions and requisite approvals.
Managing director of IMFA Subhrakant Panda said this transformational acquisition will fast track the company’s expansion plans. “Along with our ongoing greenfield expansion, it will take total installed capacity beyond 0.5 million tonne, 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,” he said.
Panda said the company is committed to create value for stakeholders. Building on the strong foundation of a fully integrated business model, it 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, he added.
IMFA’s board also approved the Q2 FY26 financial results and announced a 50 per cent (`5 per share) interim dividend at its meeting. The company reported the second-quarter earnings with net profit declining to `98.77 crore from `125 crore during the same quarter last year.
Commenting on the results, Panda said ferro chrome prices moved up noticeably towards the end of the second quarter due to elevated chrome ore costs for non-integrated producers and a sharp cutback in output in South Africa. “This is partially reflected in the current results. We expect to see the full impact in the ongoing quarter with the increase in benchmark as well as higher spot prices,” he said.
