Indian Metals and Ferro Alloys Ltd. to Acquire Tata Steel's Ferro Alloys Plant, Doubling Capacity

Indian Metals and Ferro Alloys Ltd. (IMFA) announced on Tuesday, November 4, that its board of directors has approved the acquisition of Tata Steel's ferro alloys plant located in Kalinganagar, Odisha. The acquisition value is set at ₹610 crore, with additional costs for GST and net working capital. The transaction is projected to be completed within the next three to six months.

This acquisition is a key part of IMFA's strategic plan to accelerate growth in its ferro alloys business through capacity expansion. The company intends to double its ferro chrome production capacity. With its current capacity at 2.84 lakh tonne and an ongoing organic expansion of 1 lakh tonne, the total capacity post-acquisition and expansion will reach 5.34 lakh tonne.

The deal offers significant advantages, including a favorable location close to IMFA's captive mines and its upcoming greenfield project in Kalinganagar. These proximity benefits are expected to create cost synergies and enhance IMFA's ability to cater to new opportunities, with a particular focus on the domestic market.

**Impact** This move is expected to substantially increase IMFA's scale of operations, bolstering its competitive position in the ferro alloys market. The enhanced capacity, coupled with cost efficiencies and strong domestic demand outlook, could lead to improved financial performance and profitability. Rating: 8/10.

**Heading: Difficult Terms Explained**

**Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)**: A financial metric used to measure a company's operating performance before accounting for interest expenses, taxes, depreciation, and amortization. It provides an indication of a company's profitability from its core business operations.

**Captive Mines**: Mining operations owned and controlled by a company to ensure a dedicated supply of raw materials for its own industrial processes.

**Greenfield Project**: A development project where a new facility is built on undeveloped land, meaning no prior structures need to be cleared or modified.

**Cost Synergies**: Cost savings achieved when two businesses are combined, typically through increased efficiency, reduced duplication of services, or greater purchasing power.