Shyam Metalics Eyes $1 Bn In Revenue From Stainless Steel Business

Shyam Metalics and Energy eyes revenues of $1 billion from the stainless steel business after it acquired Mittal Corp through the corporate insolvency resolution process (CIRP).

Brij Bhushan Agarwal, vice chairman and managing director of Shyam Metalics, said that Mittal Corp would add Rs 2,000 crore and there were plans for new products in flat and value addition. In the next five years, revenues of $1 billion will be generated, he said.

The company is entering the special steel segment by acquiring Mittal Corp. Last month, the committee of creditors (CoC) of Mittal Corp approved the resolution plan and a letter of intent has been issued in the name of its subsidiary, Shyam Sel and Power. This was subject to confirmation from the National Company Law Tribunal (NCLT). The total cost of acquisition and upgradation is understood to be about Rs 450 crore.

Agarwal is betting big on stainless steel, expecting demand from the Indian Railways and infrastructure segments. “We also see good requirements from the defence sector,” he said.

The focus in stainless steel would not be on nickel-intensive products. “We would look at products where the nickel percentage is not more than 2-3 per cent,” he said, adding that most of the other key ingredients were with Shyam Metalics.

In FY22, the consolidated net sales of Shyam Metalics stood at Rs 10,393.96 crore. The company has a diversified product portfolio of pellets, sponge iron, billets and value-added end-products like TMT bars, wire rods, and structural.

The product basket is being expanded as the company lines up an investment of Rs 10,000 crore over the next 5-6 years across the metals business. Going forward, ductile iron used in a wide variety of industrial applications, and roofing sheets for buildings, would be significant revenue streams.

Shyam Metalics last year acquired Ramsarup Industries, and Agarwal said that the company was investing about Rs 1,000 crore in capex there in the first phase. “We are rebuilding the plant and coming up with ductile iron business which will be commissioned in 2025-2026,” he said.

He also said that Rs 3,400-4,000 crore revenue was expected from roofing sheets in the next 3-4 years. Of the Rs 10,000 crore planned, about Rs 2,500 crore had already been invested.

• Mittal Corp to add Rs 2,000 crore and plans afoot for new products in flat and value addition in long stainless steel to take revenues from stainless steel to $1 billion

• Resolution plan for Mittal Corp awaiting NCLT approval

• Total cost of acquisition along with upgradation pegged at Rs 450 crore