Rising steel prices replenish Tata Steel’s coffers; help loan repayment plans

Tata Steel’s gets help for loan repayment plans.

The continued spike in steel prices in the first quarter of the current fiscal year is expected to help Tata Steel further reduce its bulk debt, with steel prices rising nearly 10 per cent to Rs 72,000 after two months of recent price revisions this quarter (April-June). Thanks to high global demand and profit margins, Tata Steel repaid INR 30000 crore in net debt in the past fiscal year.

Tata Steel (Earnings Before Taxes on Interest, Depreciation and Amortization) per ton increased to INT27,828 in January-March 2021 from INR 12,573 in the same period last year. “The 10 per cent rise in steel prices will have a corresponding impact on Tata Steel’s EBITDA,” said a global research analyst.Rising steel prices replenish Tata Steel's coffers; help loan repayment plans

The steelmaker, who struggled with its $ 12 billion acquisition of Corus Plc in 2007, Had trouble reducing its net debt to INR 75,389 crore from INR 1.04,779 crore last fiscal year. Tata Steel generated a free cash flow of INR 23,748 crore. It made a net loan repayment of Rs 30,560 crore. 

Industry insiders previously estimated that the net debt to be around 45 billion. According to the latest reports, the steelmaker wants advance payments of 1 billion.

Tata Steel is currently focusing on the Indian market as the demand scenario in the country is promising: Indian steel prices continued to improve amid strong demand and cost pressures for iron ore, as well as the increased upside potential of high import parity prices. Saw a general recovery last year. Steel consumption rose by 19.5 per cent from January to March. 

Tata Steel’s (including Tata Steel Europe) consolidated EBITDA increased 71 per cent to Rs 30,892 billion. Sales generated in India rose 62 per cent to Rs.28,587 billion. Steel will be included in the 30-stock BSE Sensex Index after a six-month gap and will replace Oil and Natural Gas Corporation (ONGC) on June 21.

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