Indian Metals & Ferro Alloys Limited (IMFA) has made a significant move to expand its ferro alloys business by announcing the acquisition of Tata Steel Limited's ferro chrome plant in Kalinganagar, Odisha. The deal, valued at a base purchase consideration of Rs 610.00 crores plus applicable GST and net working capital, marks a strategic step for IMFA to strengthen its position in the ferro alloys market.

Key Highlights of the Acquisition

• Asset Transfer Agreement: IMFA has signed an Asset Transfer Agreement with Tata Steel Limited for the Kalinganagar plant.
• Capacity Expansion: The acquisition includes a 99 MVA furnace capacity, comprising 66 MVA existing (100,000 tpa annual output) and 33 MVA under construction (50,000 tpa annual output).
• Land Assets: The facility is set up on 115 acres of land at Kalinganagar, Odisha.
• Strategic Benefits: The proximity to IMFA's captive chrome ore mines and upcoming greenfield expansion project is expected to lead to significant cost savings and operational synergies.
• Market Position: This acquisition will make IMFA India's largest producer of ferro chrome and the 6th largest globally.

Financial Implications and Funding

The acquisition will be financed entirely from internal accruals, showcasing IMFA's strong financial position. The deal is expected to close within 3-6 months, subject to regulatory approvals and other conditions.

Capacity and Production Outlook

• Total Installed Capacity: Post-acquisition, IMFA's total installed capacity will exceed 0.5 million tonnes per annum.
• Production Forecast:
  • FY27: ~400,000 tonnes (including existing capacity, acquisition, and greenfield expansion)
  • FY28: Expected to scale up to ~475,000 tonnes

Q2 FY2026 Financial Results

Alongside the acquisition announcement, IMFA also released its financial results for the quarter ended September 30, 2025:

Dividend Declaration

The Board of Directors has declared an interim dividend of Rs 5.00 per equity share (50% on face value of Rs 10.00), with the record date set for November 11, 2025.

Management Commentary

Mr. Subhrakant Panda, Managing Director of IMFA, commented on the acquisition: "I am delighted to announce this transformational acquisition which will fast track our expansion plans. Along with our ongoing greenfield expansion, it will take total installed capacity beyond 0.5 million tonnes enabling us to increase our market share with a particular focus on domestic sales at a time when demand for ferro chrome is increasing due to India's rapid economic growth."

He added, "We are committed to creating value for stakeholders and, building on the strong foundation of a fully integrated business model, will work to realize cost savings and operational synergies which will have a positive impact on the bottom line."

Regarding the Q2 results, Mr. Panda noted, "Ferro Chrome prices moved up noticeably towards the end of the second quarter due to elevated chrome ore costs for non-integrated producers and a sharp cutback in output in South Africa. This is partially reflected in the current results, and we expect to see the full impact in the ongoing quarter with the increase in benchmark as well as higher spot prices."

The strategic acquisition, coupled with strong financial performance and a generous dividend, positions IMFA for significant growth in the ferro alloys sector, capitalizing on the increasing demand driven by India's economic expansion.

Indian Metals & Ferro Alloys (IMFA), a leading ferro alloy producer, has reported a mixed financial performance for the second quarter, with revenue growth but a decline in profitability.

Financial Performance

IMFA's financial results for Q2 show:

Key Highlights

1. Revenue Growth: Despite challenging market conditions, the company managed to increase its revenue year-over-year.

2. Profitability Pressure: The decline in EBITDA and EBITDA margin indicates pressure on profitability, possibly due to increased costs or market challenges.

3. Strategic Acquisition: IMFA's board has approved an asset transfer agreement with Tata Steel to acquire a ferro alloys plant in Kalinganagar for ₹610.00 crores, signaling a significant expansion move.

Market Context

The ferro alloy industry continues to face challenges due to global economic uncertainties and fluctuations in raw material prices. IMFA's performance reflects these broader market conditions, with pressure on profit margins despite revenue growth.

Looking Ahead

The acquisition of the Tata Steel ferro alloys plant in Kalinganagar could potentially strengthen IMFA's market position and production capabilities. However, the company may need to focus on improving operational efficiency and cost management to address the declining profitability.

While Indian Metals & Ferro Alloys has seen growth in revenue, the decline in EBITDA and margins suggests that the company may face challenges in maintaining profitability in the current market environment. The management's ability to successfully integrate the newly acquired plant and optimize operations will be crucial for the company's future performance.