Electrosteel Steels receives indication for investment from Tata Group

Company gets indication for investment from Singapore-based financial investor as well

Electrosteel Steels said it had got an indication for investment in the company from Tata Group, as well as from a Singapore-based financial investor.

“(Our) bankers and the company are exploring the proposals,” it said in a BSE filing notification.

Last month, the exchange had sought a clarification from Tata Steel on a news item that the company was in advanced talks with Electrosteel Steels. Tata had then said it was business strategy to regularly evaluate growth opportunities. “(We) are committed to making disclosures at the appropriate time...the company has robust disclosure principles and follows a policy of not commenting on market speculation,” it had said in an exchange notification. Electrosteel is setting up a 2.51-million tonne integrated  plant in Bokaro district of Jharkhand. It had debt close to Rs 10,000 crore as on March 31, 2014; the debt-equity ratio had risen to 4.72, from 1.76 in FY11.

In the year ended March 2015, Electrosteel said its expenses were 10 per cent higher from the net sales of Rs 1,831 crore. Net sales in FY15 rose more than three times but were unable to beat high expenses, a case similar to 2013-14 (April-March).

This apart, the finance cost was more than double on a year-on-year basis, at Rs 451 crore in the period. Due to this, the loss had widened in the year gone by to Rs 624 crore, from Rs 291 crore in the corresponding period a year before.