On Wednesday, Tata Steel disclosed that it had purchased Rs 300 crore worth of shares in Neelachal Ispat Nigam Ltd., a firm that is an indirect subsidiary of the company.

Tata Steel made its Tranche 1 investment in Neelachal Ispat Nigam Ltd. on February 21, 2023, by subscribing to 4,687,500 equity shares of Rs 10 each at a premium of Rs 54 per share, totaling Rs 300 crore.

According to the company’s regulatory filing, “On February 21, 2023, the Company acquired 4,687,500 equity shares of NINL with a face value of $10 each at a premium of $54 per share for an aggregate value of $300 crore, constituting Tranche 1 of the investment in the equity shares of NINL.”

The funds will be used for NINL’s working capital and capital expenditure requirements, as well as for the startup of the iron and steel factory in Kalinga nagar, the repayment or prepayment of liabilities, and other general corporate goals.

Tata Steel’s stake in Neelachal Ispat Nigam Ltd increased from 1.88 percent to 5.23 percent as a result of the transaction.

NINL runs an integrated iron and steel facility with a 1.1 MTPA production capacity and iron ore mines with a 90 MT reserve in Kalinganagar, Odisha. It made 257.58 crores in income in the fiscal year 2021–2022.

In July of last year, the Tata group completed the purchase of 93.71% of Neelachal Ispat Nigam Ltd (NINL) through its listed step-down subsidiary, Tata Steel Long Products.

Tata Steel Long Products was chosen as the successful bidder for the one million tonnes (mt) Neelachal Ispat Nigam Ltd, an asset owned by central and state public sector organizations, in a procedure administered by the Department of Disinvestment and Public Asset Management (DIPAM) for a value of Rs. 12,100 crores.

The price of the company’s shares on the BSE decreased by 1.81 percent to 111.15.