Rising steel prices and firm demand may prompt Tata Steel to advance its stated capacity expansion target by a few years, CEO and managing director TV Narendran told FE on Wednesday. He said that if the company advances the expansion plan, it could achieve its target of installed capacity of 40 million tonne in India, ahead of the targeted 2030. The company’s current installed capacity in India is at 20.6 million tonne. It reported production of 19.06 million tonne in FY22.

The company has guided Rs 12,000-crore capital expenditure for the current financial year. However, it will review the same after six months, and if the need arises it could be revised upwards. “If the markets are good, the cash flows are strong and the deleveraging is also happening as we had planned, we can always go back to the board and ask for more and spend more,” Narendran said.

“Unlike earlier when the group had just one site in Jamshedpur, the growth could happen only sequentially. Today, we have two sites in Kalinganagar and one in Angul — so we have the optionality that tomorrow if the demand in India really picks up and the profitability continues to be fantastic we can grow faster,” he added.

He said that though the company is not revising the timeline of 2030 as yet, it will keep reviewing it. “If we can accelerate it, we certainly will,” Narendran said.

Tata Steel has outlined that the 40-million tonne plan entails taking the Kalinganagar site to about 16 million tonne from the current 8 million tonne expansion which is underway, expanding the Neelachal Ispat Nigam (NINL) site to 10 million tonne from the current 1 million tonne capacity. NINL’s acquisition is expected to be complete by June. After acquiring Bhushan Steel, its capacity has been expanded from 3 million tonne to 5 million tonne per annum and can further go to 10 million tonne.

“All these possibilities are available with us, and we will exercise what is the most capital-efficient way to grow and because it is organic growth, it is not going to be a big lump sum amount of expenditure. We can pace it any which way we like,” he said.

Additionally, Tata Steel is also building smaller scrap recycling facilities in north, west and south, which gives it the option to add 0.75 million tonne of capacity at different locations in northern, western and southern India.

As of now, Rs 8,500 crore has been earmarked for the ongoing Kalinganagar expansion from 3 million tonne per annum to 8 million tonne and significant expansions in the company’s iron ore mining, which it is planning to increase from 33 million tonne to 50 million tonne per annum over the next few years. The remaining Rs 3,500 crore is for Europe business. In addition, the company will also be spending Rs 12,000 crore to close the recent acquisition of NINL during the year.