Tata Steel targets 30% ROC in 5 yrs

Koushik Chatterjee, Group CFO of Tata Steel said that external capital will be tough to raise. They have syndicated their entire Corus acquisition debt, he said. The company does not have any immediate fund requirements or any balance sheet issues, he said. Cost of capital is higher as the premium on risk is much higher, he said. Overall leverage will not allow companies to take on too much external capital, Chatterjee said. Steel growth will be tad lower than the 6.5% forecasted, he added. Even at lower demand, steel would have supply constraints, he said. Chatterjee feels that spot steel prices have softened a bit. Raw material metal spread is still at comfortable levels, he said. The company is targeting combined return on capital of 30% in five years.The precious metals have bounced back drastically. So gold and silver had 11-15% rallies but base metals generally have been grinding down globally over the last couple of months. .NS