To raise Rs 6,700 crore, bring debt ratio further down.
Tata Steel Ltd has reported a net profit of Rs 1,978.8 crore (consolidated) for the quarter ended September 30, as against a loss of Rs 2,707 crore for the same period last year. Net sales for the company, on a consolidated basis, grew by 11 per cent, at Rs 28,090.9 crore for the given three months.
The company posted an Ebitda (earnings before interest, taxes, depreciation and amortisation) of Rs 9,024 crore for the first half of the year, up by 15 times from the same six months last year.
Koushik Chatterjee, Group CFO, said: “In India, the company sold more tonnage, at 1.7 million tonnes (mt), for the second quarter as against 1.47 mt for the same period last year. However, the volumes’ impact was lowered, as the prices in India were lower. In Europe, the prices for the quarter were higher but the volumes were lower.”
Karl-Ulrich Kohler, managing director and CEO, Tata Steel Europe, said: “Prices in Europe are not sufficient to support the business. We hope demand will pick up and prices will move up to where they belong." He further said the capacity utilisation in Europe was around 90 per cent.
Hemant Nerurkar, managing director, Tata Steel, said: “We expect steel prices in India to firm up,” adding, “We are focusing on the introduction of higher value-added products to our existing product range to ensure we retain market leadership in future.”
Tata Steel’s board had approved the raising of $1.5 billion (Rs 6,700 crore). Chatterjee said, “We will raise the money when the market is right.” He said the company hadn’t decided on the instrument that will be used to raise the money. He said, “It could be equity shares, currency bonds or the DVR route.” The company will need shareholders' approval, too.
The debt to equity ratio for the quarter was 1.5:1 and Chatterjee said the company would work to bring it down to 1.1:1. He said, “We have repaid a total of £600 million (Rs 4,265 crore) of debt in the first half of the current year.”
