FY23 a challenging year for debt reduction: Tata Steel

Tata Steel’s stated strategy to reduce $1 billion worth of debt every year may face challenges this year owing to heightened input costs and acquisitions, said TV Narendran, CEO and Managing Director, Tata Steel Limited.

“What we were committed to about three, four years back is at least a billion dollars of deleveraging every year. We did more than that in the last few years. This year, of course, it's a challenging year because of gas prices in Europe, coal prices and working capital,” Narendran said. The top official spoke to Moneycontrol on the sidelines of the World Economic Forum at Davos.

In addition to higher input costs and working capital requirements, he pointed out Tata Steel’s recent acquisition of Odisha-based Neelachal Ispat Nigam Ltd as further adding to expenses seen in the current financial year. In July 2022, Tata Steel completed the acquisition of Neelachal Ispat for an aggregate consideration of Rs 12,100 crore.

“So this year, I don't know if we are going to have that deleveraging (of $ 1 billion). But the commitment to deleveraging continues,” he said. Tata Steel reported a gross debt of Rs 87,516 crore as of the quarter ended September 30, 2022.