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Tata Steel BSL

Overview

Tata Steel BSL Limited was an Indian steel manufacturing company, formerly known as Bhushan Steel Limited. Following its acquisition by Tata Steel under the insolvency resolution process initiated in line with the Insolvency and Bankruptcy Code (IBC), 2016, the company was renamed Tata Steel BSL in 2018 and subsequently merged into Tata Steel Limited. It produced flat steel products including hot-rolled, cold-rolled, and galvanised steel for sectors such as automobiles, white goods, construction, and infrastructure.

Key facts

Former name Bhushan Steel Limited
Industry Steel manufacturing
Country India
Parent Tata Steel Limited
Status Merged into Tata Steel Limited
Renamed 2018 (from Bhushan Steel to Tata Steel BSL)

Background

Bhushan Steel Limited was promoted by the Singal family and grew into one of India's largest producers of auto-grade flat steel, with manufacturing facilities at Khopoli in Maharashtra, Sahibabad in Uttar Pradesh, and a large integrated steel plant at Meramandali in the Dhenkanal district of Odisha. The company expanded aggressively during the 2000s, financed primarily through bank borrowings.

By the mid-2010s, Bhushan Steel was unable to service its debt obligations and became one of the largest non-performing accounts in the Indian banking system. It was among the twelve large stressed accounts identified by the Reserve Bank of India in 2017 for resolution under the newly enacted Insolvency and Bankruptcy Code.

Acquisition by Tata Steel

In 2017, the Corporate Insolvency Resolution Process (CIRP) was initiated against Bhushan Steel before the National Company Law Tribunal (NCLT). Tata Steel emerged as the successful resolution applicant, and the resolution plan was approved by the NCLT in May 2018. Tata Steel acquired a controlling stake through its subsidiary Bamnipal Steel Limited, marking one of the first major resolutions completed under the IBC framework.

Following the acquisition, the company was renamed Tata Steel BSL Limited in November 2018, signalling its integration into the Tata Steel group while retaining its listed status for a period.

Operations

The Meramandali plant in Odisha formed the core of Tata Steel BSL's operations, with an integrated facility producing hot-rolled coils, cold-rolled coils, galvanised steel, colour-coated sheets, and high-tensile steel. The Khopoli and Sahibabad units focused on downstream cold rolling and galvanising. The product portfolio served automobile manufacturers, consumer durables makers, and construction firms.

Merger with Tata Steel

In 2021, the boards of Tata Steel and Tata Steel BSL approved a scheme of amalgamation under which Tata Steel BSL would merge into Tata Steel Limited. The merger received regulatory and NCLT approvals and became effective in November 2021, after which Tata Steel BSL ceased to exist as a separate listed entity and its operations became part of Tata Steel.

Significance

The resolution of Bhushan Steel was widely regarded as a landmark case in the application of India's Insolvency and Bankruptcy Code, demonstrating the framework's potential for resolving large stressed corporate accounts. The acquisition also significantly expanded Tata Steel's domestic crude steel capacity and strengthened its presence in the flat products segment.

References