Would be cautious on metal stocks going into 2018: Rakesh Arora

Tata Steel has announced its biggest expansion plan in 4 years, set to pump in Rs 23,000 crore to add capacity at its Kalinga-Nagar plant in Odisha. In an interview with CNBC-TV18, Rakesh Arora, Managing Partner of Go India Advisors discussed about the same.

This was expected. Tata Steel’s balance sheet is still not so strong and they are doing an equity raise, which makes it easier to digest that this big expansion is being done, he said.

They are doing a massive equity raise, so their balance sheet remains well funded to do one-two more acquisitions, so rights issue is giving us more comfort, he added.

People are hoping that once the new production starts after the Chinese New Year -- inventory level is low and that will support steel prices. So to that extent, I would say that steel prices are supported for some more time but I am more skeptical about 2018. I don’t think commodity prices would go up much from hereon, said Arora.