India Inc. on a steely voyage

Since the landmark acquisition of Corus by Tata Steel, Indian steel companies seem to have developed a hunger for acquiring steel companies and raw material assets across the globe.

Tata Steel itself has acquired a coal mine in Mozambique with reserves of 1.94 billion tonnes and an iron ore mining operation in Ivory Coast with reserves of over 750 million tonnes. Says Pawan Burde, Senior Research Analyst, Angel Broking: “Steel companies are expanding their operations abroad for three reasons.

The primary one is to gain a cost advantage through backward integration. Then, buying assets abroad helps them acquire scale and capture a slice of the global market. And finally, it helps them diversify their product range.” Essar Steel and JSW Steel are also aggressively expanding their footprints in North and South America and Africa.

 —T.V. Mahalingam