India's Competition Commission has found major steelmakers including Tata Steel Ltd., JSW Steel Ltd., and state-owned Steel Authority of India Ltd. in violation of competition law through price collusion, according to a Reuters exclusive report. The investigation marks one of the most high-profile regulatory actions against the country's steel industry giants.

Investigation Findings and Evidence

The Competition Commission of India probe has identified 28 firms in breach of antitrust norms, with collusion activities spanning between 2015 and 2023. The investigation has also held 56 top executives liable for price fixing, including prominent industry leaders such as JSW Managing Director Sajjan Jindal, Tata Steel CEO T.V. Narendran, and four former SAIL chairpersons.

According to an internal CCI document, officials uncovered WhatsApp messages exchanged among regional industry groups that suggested price fixing and production curbs. This digital evidence forms a crucial part of the case against the steel companies.

Market Response and Company Reactions

Following the Reuters report, shares of JSW Steel, SAIL and Tata Steel fell during trading, while the Nifty Metal index also turned negative. The market reaction reflects investor concerns about potential penalties and regulatory implications for the steel sector.

Investigation Background and Expansion

The Competition Commission investigation commenced in 2021 following allegations from a builders' association in a case filed before a Tamil Nadu state court. The group alleged that steel companies were collectively restricting supply and artificially inflating prices.

The probe was subsequently expanded to cover up to 31 companies and industry groups, along with dozens of executives. Reuters had previously reported that the watchdog conducted raids on several steel companies as part of the broader industry investigation.

Regulatory Process and Potential Penalties

The Competition Commission's order, dated October 6, states that the investigation has "found the conduct of the parties to be in contravention" of Indian antitrust law. The findings will undergo review by senior CCI officials, with companies and executives granted the opportunity to submit objections before a final order is issued.

Under antitrust regulations, the Competition Commission possesses authority to impose substantial penalties on steel companies, with fines reaching up to three times their profit or 10% of annual turnover, whichever is higher, for each year of wrongdoing. Individual executives also face potential financial penalties for their involvement in the alleged collusion activities. India is the world's second-largest producer of crude steel, making this investigation particularly significant for the global steel market.

While most Tata Group stocks faced significant headwinds in 2025, with the conglomerate losing approximately ₹3.4 lakh crore in market value, Tata Steel emerged as a standout performer. The steel major delivered impressive gains of 30.4%, adding ₹52,368 crore in market value and positioning itself as the group's joint best-performing stock alongside Tata Consumer Products.

Operational Excellence Drives Performance

Tata Steel's operational resilience has been a key driver of its strong performance. The company's asset profile continues to improve, with an increasing contribution from its higher-margin India business. The share of India volumes has grown steadily from 33% in FY15 to 68% in FY25, and is projected to reach 72% by FY28E, supporting a structurally stronger earnings mix.

The company's recently commissioned 5 million tonne per annum capacity in India is ramping up and is expected to drive a healthy 6% CAGR in domestic steel volumes over FY25 to FY28E. Additionally, Tata Steel is setting up a 0.85 million tonne electric arc furnace scheduled for commissioning in March 2026, with plans to evaluate another EAF facility.

Strategic Capacity Expansion Plans

In a recent analyst meeting, Tata Steel reaffirmed its long-term growth strategy and announced several capacity additions. The board approved the Phase 1 expansion of the NINL (Neelacal Ispat Nigam Ltd) long products facility, increasing capacity by 4.8 million tonnes per annum, from 1.1 million tonnes to 5.9 million tonnes per annum.

The company also approved the installation of 2.5 million tonnes per annum Thin Slab Caster and Rolling facilities at Tata Steel Meramandal, further enhancing finished steel capacity in flat products. To strengthen its automotive segment presence, Tata Steel approved setting up a 0.7 million tonnes per annum hot rolled pickling and galvanising line at its Cold Rolling Complex in Tarapur, Maharashtra.

Government Support Bolsters Outlook

The Indian government imposed a three-year import tariff of 11-12% on select steel products, as announced in a finance ministry order published on December 30. This measure aims to curb cheap shipments from China and provides stronger pricing protection for domestic manufacturers. Despite muted steel prices in the current calendar year, India continues to stand out as a global bright spot for steel consumption, with domestic demand growing in the lower double digits and consumption rising by approximately 8% in the first eight months of the current fiscal.

Analyst Targets and Valuation Metrics

Jefferies has raised its target price to ₹230 with a Buy rating, representing a 31% upside potential from current market levels. Axis Securities maintains a Buy call with a target of ₹195. The brokerage has increased EBITDA estimates for FY26-FY28E by 4-6% and EPS estimates by 9-11%, with FY27-FY28E EPS now 6-15% above street expectations.

Tata Steel's net debt is expected to decline by 24% cumulatively over FY25 to FY28E to approximately ₹62,800 crore, equivalent to around 9% of its market capitalisation. The stock currently trades at around 2 times FY27E price-to-book ratio, with expected return on equity of 13-18% over FY26-FY28E.

European Operations Present Challenges

While the India business shows strong momentum, Tata Steel's European operations face headwinds. The Netherlands operations may see weaker profitability in the December quarter due to lower realisations, though recovery is expected from the March quarter. UK operations remain challenging, with the earlier target of EBITDA breakeven by the March quarter appearing difficult to achieve. Jefferies factors EBITDA per tonne for Tata Steel Europe at $3, $21, and $21 for the second half of FY26, FY27, and FY28E, respectively.

Tata Steel shares have risen for six consecutive sessions, gaining nearly 10% over the same period, reflecting investor confidence in the company's strategic direction and growth prospects.