New tycoons rise where the ‘dirty dozen’ fell

The company’s gesture made for a heartwarming story. But what didn’t garner as much attention was the news that Lloyds Metals and Energy is one of the few companies to have entered the steel sector in the last two decades. The company is setting up steel plants in Gadchiroli and Chandrapur districts in Maharashtra at a cost of ₹20,000-25,000 crore.

Lloyds is not alone; many other companies have entered the steel sector, lured by the prospects of a rapidly growing India needing the alloy to make roads, railways, infrastructure and houses for millions. They include ACME Group, a renewable energy company; Synergy Capital, which is backed by former ArcelorMittal dealmaker Sudhir Maheshwari; and Nithia Capital, which is headed by former Mittal Steel executive Jai Saraf.

Mint’s analysis reveals that the four companies have announced plans to invest upwards of ₹37,000 crore over the next few years either in primary steel manufacturing or elsewhere in the supply chain. In addition, two existing smaller companies, Shyam Metalics and Energy Ltd and Rashmi Group, have committed to invest ₹10,000 crore each to bolster their operations.

Existing large steelmakers, too, are betting aggressively on the market expanding. India’s five largest steelmakers are expected to add upwards of 60 million tonnes per annum (mtpa) of capacity by 2030. This compares to installed capacity of about 100 mtpa as of 2024-25.

“India’s steel demand is expanding at 8-9%, which is prompting both established producers and select new players to invest in the sector,” said Dhruv Goel, chief executive officer (CEO) of BigMint, a commodities market intelligence firm specializing in steel.

This marks a stark departure from the past decade and a half, when bankruptcies in the sector led to a phase of sharp consolidation. Steel companies were the largest cohort in the ‘dirty dozen’—the 12 large-scale corporate defaulters identified by the Reserve Bank of India (RBI) in June 2017 to be placed in debt resolution proceedings under the then newly formed Insolvency and Bankruptcy Code, 2016. They included Bhushan Steel Ltd, Bhushan Power & Steel Ltd, Essar Steel, Monnet Ispat & Energy Ltd and Electrosteel Steels Ltd.

The bankruptcies and resultant consolidation left only five large and three mid-sized companies. In addition, there was a long tail of secondary steelmakers that made the alloy using much smaller furnaces instead of large blast furnaces costing thousands of crores. As per one estimate by Crisil, there are over 900 such small steel producers.

“Steel manufacturing is a capital-intensive industry with a long gestation period, resulting in limited and infrequent entry of new manufacturers, particularly after the NPA (non-performing asset) issues that arose in the 2010s,” said Sehul Bhatt, director, Crisil Intelligence.

Experts say the new entities coming in could be the first signs of the steel sector becoming more diversified. However, they add that the tight grip of the leading steel mills will not end anytime soon.

The challenges before the new entrants are many—the sector is notorious for swings between long boom and bust cycles, the hegemony of large names whose scale has become a vast moat, and multi-year-low steel prices at a time when they are drawing up large investments.

What’s keeping them driven is the promise of India’s steel consumption boom. The country uses just over 100kg of steel per capita, which is less than half the global average of 215kg and a fraction of its larger neighbour China.

This is India’s steel rush. Sort of.

The prospectors

Many of the new entrants are getting into the steel sector using their expertise in areas such as raw materials or energy as a gateway to move further downstream into steel production. Take Lloyds, for instance, which was primarily into iron ore mining, a key raw material for steel production. The company is now investing ₹20,000-25,000 crore over the next five years to build two blast furnace-based steel plants, where this iron ore will be made into steel. The company’s primary units in Gadchiroli and Chandrapur could cumulatively churn out 4.2 million tonnes of steel a year once operational.

The blast furnace in Ghugus, Chandrapur, will be operational by the end of 2027 or early 2028, said B. Prabhakaran, the company’s co-promoter and managing director. The plant in Konsari, Gadchiroli, is expected to be fired up by 2029-30, he said.

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BigMint’s Goel highlighted that Lloyds has legacy mines that do not attract the high premiums seen in blocks auctioned under new rules since 2015. This makes its mining operations highly profitable, funding a bulk of its investments in steelmaking.

Renewable energy company ACME is using a different gateway: energy. Another key input to make steel, ACME Group will utilize the renewable energy and green hydrogen it produces within the group to make direct reduced iron (DRI), a precursor to steel. The company has lined up an investment of ₹5,000 crore to establish a 1.2 mtpa green DRI facility either in Odisha or at Duqm in Oman, two sites where it is developing green hydrogen manufacturing.

A DRI furnace is different from a blast furnace. It tends to be smaller, costs relatively less, and works at much lower temperatures. More importantly, it can work well with hydrogen as a fuel instead of coal and thus has lower emissions. The iron thus produced typically goes to electric arc furnaces to be made into steel, cutting emissions even further compared to a blast furnace-basic oxygen furnace combination that uses a lot of coal.

The company has inked an offtake agreement with Vietnam’s Stavian Industrial Metals to buy two-thirds of the 1.2 mtpa DRI produced by it over 10 years.

ACME Group will utilize the renewable energy and green hydrogen it produces within the group to make direct reduced iron, a precursor to steel.

Manoj Kumar Upadhyay, chairman of ACME Group, said he saw an opportunity in the green steel market in light of the climate commitments made by various countries and the regulatory requirements for supplying lower-emission products to geographies such as Europe. “At the group level, we are always exploring opportunities in metals as well as other sectors, where we can play a significant role in providing innovative green solutions,” he said in an email.

Sudhir Maheshwari’s Synergy Capital is taking a leaf out of the same book. While it has larger aspirations within India’s steel sector, the fund has entered the value chain through its investment in coking coal, the third key input in making steel besides iron ore and energy. The company has acquired Saurashtra Fuels’ flagship plant in Mundra, Gujarat, which gives it access to 600,000 tonnes of high-quality metallurgical coke annually. It plans to resume operations at the plant towards the end of 2025.

Maheshwari spent 26 years at ArcelorMittal, the world’s largest steel company outside China, headed by Lakshmi Mittal.

Synergy is betting on India’s “ambitious plans of investment in infrastructure,” Davinder Chugh, senior partner and chief operating officer at Synergy Capital, said in an email. “India has an ambitious plan to promote steel production growth to 300 mtpa by 2030. This underwrites a robust demand for metallurgical coke,” he said.

Nithia Capital, backed by another executive who worked for Mittal, has taken a more direct approach. Jai Saraf, founder and CEO of Nithia Capital, worked at Mittal Steel before its merger with Arcelor. The fund acquired two bankrupt steel units, Uttam Galva Metallics and Uttam Value Steel, in late 2020, during the thick of the covid-19 pandemic. The units were brought under the Evonith brand and their steelmaking capacity has been ramped up to 1.4 mtpa from 0.5 mtpa.

Last month, Nithia Capital and its investment holding company, Evonith Holdings Pte Ltd, completed the acquisition of Topworth Urja and Metals for ₹300 crore. Nithia has lined up an undisclosed sum to rehabilitate and expand Urja’s operations to 0.5 mtpa from the current 0.2 mtpa.

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Saraf said his aspiration is to become one of the top five steelmakers in India. He wants to ramp up the capacity at Evonith’s Wardha facility to 3.5 mtpa by 2030 with an estimated investment of ₹5,500-6,000 crore.

Saraf told Mint he plans to list the company in India to fund this investment. Meanwhile, Nithia Capital is also on the lookout for more bargain acquisitions to take its consolidated capacity to 6 mtpa by the end of this decade.

Kolkata-based Rashmi Group and Shyam Metalics and Energy, which have been in the sector for several years, are also rapidly expanding their scale. However, these companies are secondary steelmakers—they do not use blast furnaces.

Rashmi Group last month, announced it will invest ₹10,000 crore to set up an integrated steel and power unit at Purulia in West Bengal. The plant will have steelmaking capacity of 2.8 mtpa and power generation capacity of 400MW. Queries to Rashmi Group on its plans remained unanswered at the time of publishing this report.

Shyam Metalics and Energy last month, gave a guidance for an investment of ₹10,000 crore by 2031 to increase its capacity to 27 mtpa from 15 mtpa now. The company’s manufacturing footprint today spans long steel products, ferroalloys, aluminium and stainless steel. Earlier this month, Ramsarup Industries Ltd, part of Shyam Metalics, commissioned a small 0.45 mtpa blast furnace.

No match for the leaders

India’s crude steel production rose 10.5% year on year to 122.4 million tonnes during the first nine months of 2025, outpacing global peers.

Five incumbents—JSW Steel Ltd, Tata Steel Ltd, Steel Authority of India Ltd (sail), Jindal Steel Ltd and ArcelorMittal Nippon Steel India (AMNS India)—control about half of the country’s steel market, according to estimates by BigMint and Axis Capital.

The concentration came about over the last decade as steelmakers such as Essar, Bhushan and Monnet went bankrupt and their capacities were acquired by peers. A super rally in the steel market between 2020-21 and 2022-23 saw these companies make bumper returns, enough to deleverage their balance sheets and invest in future expansion. In fact, in fiscal year 2022, Tata Steel made a bigger profit than Tata Consultancy Services Ltd, the Tata group’s information technology services cash cow.

Does the entry of new players mark the end of consolidation? Parthiv Jhonsa, vice president at Anand Rathi, doesn’t think so. “We believe the consolidation trend in India’s ferrous sector is here to stay. While new entrants may continue to emerge, their incremental capacity additions will remain relatively small compared to the top five tier-I mills,” he said.

Jhonsa explained that the leaders continue to expand their majority share. “The smaller players entering now are primarily doing so to capture niche opportunities, either by serving regional demand pockets or setting up plants in under penetrated geographies,” said Jhonsa. Highlighting the example of Lloyds, he said that the company aims “to address both growing regional demand and newer industrial clusters.”

The capacity additions by the new entrants are also tiny in comparison with the mega expansions lined up by the large incumbents. This continued execution of multibillion-dollar capacity expansion even amid a low-price environment reflects management confidence in the sector’s long-term fundamentals, said Jhonsa.

Price impact

Steel prices have dipped to multi-year lows in India. This is even before the fresh capacity added by the incumbents and the new players becomes operational in coming years, raising concerns of oversupply.

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Flat steel used in automobiles and appliances is at a nine-month low and construction steel has dropped to its weakest level in nearly five years amid weak infrastructure demand and oversupply in October. Benchmark hot-rolled coil prices have slid to ₹48,275 per tonne—the lowest since February—while rebar prices are at around ₹47,000 per tonne, the lowest level since November 2020, according to BigMint data as of 16 October. Steel prices have also been at a discount compared to post safeguard imports.

“Steel prices are inherently cyclical, influenced by both global and domestic factors, making profitability at any given time an unreliable indicator for capital investment decisions,” said Crisil’s Bhatt.

Given that India’s per capita steel demand was lower than global and peer country averages, manufacturers were adopting a long-term perspective, focusing on increasing downstream or upstream production to enhance market share and drive revenue growth, Bhatt added.

Crisil expects Indian steel demand to reach 210-230 million tonnes by 2029-30, driven by strong housing, infrastructure and manufacturing expansion. The country consumed 150 million tonnes of steel last year.

The falling prices haven’t deterred the large steelmakers either. “People who are adding capacities are welcome to add capacities because India needs supply as demand increases,” said JSW Steel CEO Jayant Acharya, on the sidelines of a Confederation of Indian Industry conference.

In an earlier interview with Mint, Acharya said the current temporary supply-demand mismatch, caused by several large capacity additions coming online at once, will be absorbed as the country’s rapid urbanization, infrastructure push and rising consumption drive steady growth in steel use in the coming years.

Any new projects announced now will take four to five years to start production, Acharya explained. “The current pipeline won’t be enough to meet this demand. That’s why adding more capacity now is important to keep up with the country’s growing steel needs,” he said.

Steelmakers have relatively little control over prices. Even the top five companies today are servile to global prices that are determined by factors beyond their control. What they can control is when to invest in expansion and when to become conservative.

In this context, the new entrants are making a bold bet given the unforgiving nature of the sector. After all, the landscape is dotted with the ruins of once-thriving industrial giants that went under, warning them of the dangers. Nevertheless, the promise of a growing India and its growing appetite for steel is too lucrative a bet to ignore.