Tata Steel to invest ₹33,873 crore to expand Neelachal Ispat Nigam into a 6.2 MTPA steel hub

Tata Steel is doubling down on its long-term growth strategy in India with a ₹33,873 crore investment to expand Neelachal Ispat Nigam Ltd (NINL), positioning the Odisha-based steel subsidiary at the heart of its future long products business.

The company's board has recently approved the first phase of the expansion, which will add 4.8 million tonnes per annum (MTPA) of steelmaking capacity to NINL, taking the plant's total capacity to 6.2 MTPA. The project has completed the engineering phase and is ready for execution.

Tata Steel CEO and Managing Director T. V. Narendran said in the Q1 results statement that the board has approved an allocation of ₹33,873 crore for the core project to expand steelmaking capacity by 4.8 MTPA at NINL, increasing the total capacity to 6.2 MTPA. "This expansion is the first phase of growth at NINL and is at an advanced stage of readiness following the completion of engineering."

The investment follows a remarkable turnaround at NINL after Tata Steel acquired the once-idle, cash-strapped asset. Tata Steel acquired NINL for ₹12,100 crore in 2022. Over the past two years, the plant has consistently operated at its rated capacity, emerging as one of the top-performing facilities in the group's domestic portfolio.

In FY26, NINL produced 0.95 million tonnes of crude steel and recorded deliveries of 0.91 million tonnes, matching the previous year's volumes. Revenue moderated to ₹5,282 crore as steel prices softened, but operating performance improved. EBITDA rose to ₹1,236 crore from ₹1,067 crore a year earlier, aided by lower raw material costs, lifting the EBITDA margin to 23%.

In its latest annual report, the management described the transformation as one of the company's biggest operational success stories:

"The turnaround of NINL has been a compelling success story. Since its acquisition, the plant has moved from being mothballed to operating at its rated capacity for two years. In FY26, NINL achieved a robust EBITDA margin of 23%, contributing significantly to our India performance," the management noted in the report.

The company also highlighted key operational milestones, including record crude steel and sinter production, lower raw material consumption, and complete utilisation of process solid waste, reflecting gains in both efficiency and sustainability.

NINL's role, however, extends well beyond its current performance. Tata Steel views the facility as the cornerstone of its long products strategy: "NINL now serves as a vital growth platform, and we have announced a 4.8 MTPA Phase-I expansion focused on long products. With a land bank capable of supporting 10 MTPA, NINL is strategically positioned near Kalinganagar to become a major hub for our value-added long products business, enhancing our overall market leadership."

The company expects to complete the merger of NINL with Tata Steel during FY27, simplifying governance and unlocking operational synergies. Backed by a captive iron ore mine, NINL is expected to play a central role in meeting the group's long-term raw material and capacity requirements.

Even as it embarks on this significant investment, Tata Steel continues to maintain a resilient balance sheet. Narendran noted that the company spent ₹3,579 crore on capital expenditure during the quarter.

Tata Steel ended the first quarter with net debt of ₹84,173 crore and a net debt-to-EBITDA ratio of 2.3x, below its through-cycle target range of 2.5x-3.0x. It retained liquidity of ₹45,950 crore, including cash and cash equivalents of ₹13,221 crore, providing ample financial headroom for its next phase of expansion.