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Motilal Oswal Report
Tata Steel Long Products Ltd. has acquired the government's 93.71% stake in Neelachal Ispat Nigam Ltd. for Rs 121 billion.
The deal implies an electric vehicle of Rs 129 billion (at 100% stake) for the 100 million tonne iron ore mine and the land parcel of 2,500 acres. As the Neelachal Ispat Nigam plant is a short distance away from Tata Steel Ltd.'s Kalinganagar plant, the two plants will have a certain level of operational synergies.
The management plans to set up a greenfield long steel products plant of 4.5 million tonne capacity on Neelachal Ispat Nigam's land.
This implies that the existing inefficient 1 million tonne mini blast furnace and ancillary equipment is likely to be taken out to make way for the new plant.
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