Tata Steel’s Game Plan for India

The government’s big push on infrastructure over the past few years could not have come at a better time for Tata group steel giant Tata Steel. The storied steelmaker, which thus far had been focussing on a mix of domestic and overseas operations, is now in the midst of executing a growth strategy that accords a laser-sharp focus on India. Since 2018, Tata Steel, led by its affable CEO and Managing Director T.V. Narendran, has been busy giving shape to this ambition through a series of domestic acquisitions. With buyouts of Bhushan Steel, Usha Martin and Neelachal Ispat Nigam over the past four years—totalling a staggering Rs 51,000 crore—the steel major is ramping up domestic capacity aggressively to ensure it takes full advantage of the India infrastructure opportunity. Narendran calls it “the opportunity of a lifetime” and the urgency with which Tata Steel is going about putting the strategy together is ample proof of its resolve to capitalise on it.

The India business makes eminent sense also because its European operations are facing challenges owing to weak demand and issues relating to labour unions. As of now, nearly half of Tata Steel’s consolidated revenues and about 20 per cent of its consolidated net profits still come from its European operations and the company, therefore, is keen to focus on India. In our cover story, Ashish Rukhaiyar and Krishna Gopalan take a deep look into the steel major’s plans and how it wants to use the acquisitions and the assets they bring to ramp up domestic capacity from the current 20 million tonnes to 47 million tonnes over the next few years. Having undertaken these strategic buyouts, Tata Steel can leverage them to grow without having to make further acquisitions. With the comfortable cash flows it enjoys, analysts expect Tata Steel to be able to fork out Rs 40,000-50,000 crore every year and add 4-5 million tonnes of capacity annually, going forward. For Narendran and Tata Steel, the task is cut out.

Elsewhere in this issue, Anand Adhikari talks to R. Subramaniakumar, the new MD and CEO of private sector RBL Bank, to get you the story of how the career public sector banker is planning to turn around the bank. After a period of scorching growth, the old private bank was hit by multiple challenges and mounting non-performing assets. The new CEO plans to set things right by reducing high wholesale banking exposure, building a secure book of home- and gold loans, and build on retail deposits to lower the cost of funds.

Last month, BT also hosted a glittering gathering of some of the finest names in India Inc., policymakers and thought leaders, at the BT MindRush event that also honoured business icons and India’s Best CEOs. Do take a look at that report on page 82.