Indian Metals & Ferro Alloys Ltd (IMFA) has signed binding agreements to purchase Tata Steel's ferro chrome plant at Kalinganagar, Odisha, for a base consideration of ₹610 crore.The acquisition adds 99 MVA of furnace capacity-66 MVA operational and 33 MVA under construction-raising IMFA's total installed capacity to over 0.5 million tonnes per annum.
The Kalinganagar facility, spread over 115 acres, comprises four furnaces with a total capacity of 100,000 tonnes per annum, which will increase to 150,000 tonnes after the commissioning of a fifth furnace. The plant is expected to save a lot of money by the synergy of operations due to its closeness to IMFA's captive chrome ore mines.
After the deal, IMFA will become the biggest ferro chrome producer in India and the sixth-largest in the world. The agreement, which is subject to regulatory approvals, is anticipated to be completed within three months and therefore, no external funding is required, as IMFA will use internal accruals only. This clearly indicates IMFA's strong financial position.
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Subhrakant Panda, the Managing Director of IMFA, described the acquisition as a "turning point" in the company's history and said that the initiative will not only expedite the company's growth but also make the company a leader in the domestic ferro chrome market by increasing its market share amid rising demand.
On the other hand, IMFA recorded a net profit of ₹98.77 crore in the second quarter as against ₹125.72 crore in the corresponding quarter of the previous year. Panda commented that the recent upward trend in the price of ferro chrome is due to the chrome ore prices increase for non-integrated producers and a reduction in South African production, and he expects a full realization of the benefits in the current quarter.
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