Shyam Metalics and Energy forecasts $1 billion in revenue from the stainless steel business after it acquired Mittal Corp through the corporate insolvency resolution process (CIRP).
Brij Bhushan Agarwal, vice president and managing director of Shyam Metalics, said Mittal Corp would add Rs 2000 crore and there were plans for new flat and value-added products. Over the next five years it will generate $1 billion in revenue, he said.
The company enters the specialty steel segment by acquiring Mittal Corp. Last month, Mittal Corp’s creditors’ committee (CoC) approved the resolution plan and a letter of intent was issued on behalf of its subsidiary, Shyam Sel and Power. This was subject to confirmation by the National Company Law Tribunal (NCLT). The total acquisition and upgrade cost is understood to be around Rs 450 crore.
Agarwal is betting big on stainless steel, expecting demand from the Indian railway and infrastructure segments. “We also see good requirements from the defense sector,” he said.
The focus in stainless steel would not be on nickel-intensive products. “We would look for products where the nickel percentage does not exceed 2-3 percent,” he said, adding that most of the other key ingredients were with Shyam Metalics.
In FY22, Shyam Metalics’ consolidated net sales amounted to Rs 10,393.96 crore. The company has a diversified product portfolio of pellets, sponge iron, billets and value-added end products such as TMT bars, wire rod and structural.
The product basket is expanding as the company prepares an investment of Rs 10,000 crore over the next 5-6 years in the metals business. In the future, ductile iron used in a wide variety of industrial applications and roofing sheets for buildings would be important sources of revenue.
Shyam Metalics acquired Ramsarup Industries last year, and Agarwal said the company was investing around Rs 1,000 crore in capex there in the first phase. “We are rebuilding the plant and developing the ductile iron business which will come online in 2025-2026,” he said.
It also said that revenue of Rs 3,400-4,000 crore was expected from the roofing sheets in the next 3-4 years. Of the planned Rs 10,000 crore, about Rs 2,500 crore had already been invested.