International credit rating agency Fitch Ratings has stated that it expects Indian steel producer Tata Steel’s merger plan to result in higher EBITDA. However, the financial gains could take several quarters to be realized, depending on the pace of regulatory approvals.
The proposed merger is aimed at enhancing management efficiency and deriving synergies from centralized procurement, inventory optimization and unified marketing. The agency estimates Tata Steel Limited’s EBITDA could improve by three to five percent as the company’s cost savings are expected to be over INR 8 billion
Seven companies including Tata Steel Long Products Limited (TSLPL), The Tinplate Company of India Limited (TTCIL), Tata Metaliks Limited (TML), Indian Steel and Wire Products Limited (ISWPL), Tata Steel Mining Limited (TSML) and S&T Mining Limited will be merged with Tata Steel, as SteelOrbis previously reported.