Tata Steel Ltd, one of India’s largest steel producers, plans to increase capital expenditure to about ₹20,000 crore in FY27, with more than 60% of the investment earmarked for India, as the company accelerates capacity expansion, strengthens its value-added product portfolio and advances its long-term growth strategy.
The steel major spent ₹14,559 crore on capital expenditure in FY2025-26 and said future investments will focus on expanding capacity, enhancing product mix, improving cost competitiveness and building a more sustainable and technologically advanced manufacturing base, the company said in the latest annual report
Expansion projects gather pace
A key milestone during FY26 was the commissioning of the 5 million tonne per annum (MTPA) blast furnace at Kalinganagar, increasing the integrated steel complex’s capacity to 8 MTPA.
The steel major also inaugurated a 0.75 MTPA scrap-based Electric Arc Furnace (EAF) at Ludhiana, the first in a planned series of modular and low-carbon steelmaking units.
The company has also commenced early site development work for the 4.8 MTPA Phase-I expansion of Neelachal Ispat Nigam Ltd (NINL). Regulatory approvals and engineering activities are progressing ahead of a final investment decision.
Focus on value-added products
The FY27 capital allocation programme includes investments in tinplate and wire capacity expansion, the Hot Rolled Pickling and Galvanising Line (HRPGL) project at Tarapur and new coke ovens at Jamshedpur.
The company is also investing in mining operations, supply-chain strengthening and sustainability initiatives.
Tata Steel aims to increase the share of value-added products to nearly 50% of total volumes over time, a strategy expected to improve profitability and reduce earnings volatility.
Cost reduction and sustainability push
Alongside expansion, the company has launched the next phase of its cost transformation programme targeting savings of about ₹7,100 crore in FY27.
Investments in low-emission technologies, including HIsarna and EAF-based steelmaking, are expected to improve long-term sustainability and capital efficiency.
Balance sheet strengthens
Tata Steel said it continues to fund growth largely through internal cash generation, using debt primarily for refinancing and short-term funding requirements.
During FY26, the company prepaid ₹7,556 crore of debt through internal accruals. Net debt stood at ₹80,144 crore as of March 31, 2026.
Over the past two years, net debt-to-EBITDA improved from around 3.3 times to 2.3 times. The company also reduced overseas debt from about 50% of total borrowings in FY21 to 18% in FY26, helping mitigate currency-related risks.
With liquidity of ₹45,237 crore, including cash balances and undrawn credit lines, Tata Steel said it remains well-positioned to fund growth while maintaining financial flexibility.