Tinplate, a Tata Steel subsidiary has started work on a significant capacity expansion.
- At it’s existing Jamshedpur plant, it has kicked off a Rs 2,000 crore expansion project. It would add 3,00,000 tonnes to it’s current capacity of 4,15,000 tonnes i.e., an increase of >70%.
- The project is estimated to take 3 years to complete i.e., by March 2026
- According to the management, the upcoming facilities would have state-of-the art technology and higher levels of automation to cater to domestic and export markets, minimise man-machine interface, enhance safety aspects and designed to meet the EU environmental norms.
Funding of the expansion should be least of the concern.
- It’s a Tata group Company. The Company actually is in the process of getting merged into Tata Steel; which currently owns 75% of Tinplate.
- It’s a debt free Company. It had net available liquidity of > Rs 600 crore as at September 30, 2022.
- Operationally Company has always generated cash from operations. However, being in a cyclical industry they have been volatile. Over 10 year period ended March 2022, it had generated Cash from Operations aggregating Rs 1,565 cr. One can safely assume it to generate > Rs 500 cr of operational cash over the next 3 years (period of expansion).
- Once part of Tata Steel, anyways the discussed numbers become too small in comparison.