Shyam Metalics signs Rs 50,000 crore MoU for 9 MTPA integrated steel complex in Chandrapur

Shyam Metalics & Energy Ltd has signed a memorandum of understanding with the Government of Maharashtra to establish a 9 million tonnes per annum integrated steel complex at Chandrapur, a proposed Rs 50,000 crore investment that would substantially expand the company’s manufacturing footprint beyond its existing eastern and central Indian operations.

The agreement was signed in Mumbai on October 5, 2026, by Dr P. Anbalagan, Principal Secretary for Industries, Investment and Services, Government of Maharashtra, and Brij Bhushan Agarwal, Chairman and Managing Director of Shyam Metalics.

The greenfield project is planned in two phases. Phase I will have finished steel capacity of 3.75 MTPA, while Phase II will add 5.25 MTPA. At full scale, the proposed capacity would be almost 1.8 times Shyam Metalics’ FY26 consolidated metal sales volume of 4.94 million tonnes, underlining the long-term nature of the expansion.

The complex is proposed as a fully integrated operation, incorporating pelletisation, sintering and coke making, followed by blast furnace and direct reduced iron production, steel melting, continuous casting, rolling and finishing facilities. The company intends to manufacture value-added steel for infrastructure, Construction, automotive, Railways, renewable energy, oil and gas, and heavy engineering applications.

Chandrapur’s selection reflects its proximity to iron ore reserves in neighbouring Gadchiroli, coal deposits in the Chandrapur belt, and limestone and dolomite resources. Rail, road and power connectivity were also cited as locational advantages. For Shyam Metalics, which has built its business around an integrated ore-to-metal model, access to raw materials and Logistics infrastructure will be important to the viability of a project of this scale.

The investment is also aligned with management’s stated strategy of increasing its exposure to higher-value and downstream products. In FY26, the company reported consolidated revenue from operations of Rs 18,552.21 crore and operating EBITDA of Rs 2,333.14 crore. The proposed investment is about 2.7 times its FY26 revenue, illustrating both the ambition of the project and the capital intensity that will accompany its development.

Shyam Metalics has recently been expanding in cold-rolled products, stainless steel, aluminium foil and speciality steel. For the June 2026 quarter, net sales rose 23.45 per cent year-on-year to Rs 5,455.09 crore, while profit after Tax increased 20.67 per cent to Rs 350.71 crore. Its operating margin, measured as PBIDT excluding other income, improved to 14.03 per cent from 13.12 per cent a year earlier.

The Chandrapur complex is expected to create about 10,000 direct jobs and 20,000 indirect jobs. The company said the project could support a wider regional ecosystem of MSMEs, fabrication units, engineering workshops, transporters and logistics providers, while increasing demand for local skill development.

Agarwal said the company would first focus on securing permissions, registrations, approvals and statutory clearances during FY27. This is a key qualification because the announcement is an MoU rather than a final project commissioning plan. The company has not disclosed a construction schedule, financing structure or expected commissioning date.

Shyam Metalics had previously emphasised funding expansion largely through internal accruals and maintaining a conservative financial profile. However, the scale of the Chandrapur proposal means project execution, regulatory approvals, raw material linkages and capital allocation will be closely watched.

As of 10:11 AM on October 5, 2026, Shyam Metalics shares were trading at Rs 1,032.50, down 1.34 per cent from the previous close. The stock was about 6.7 per cent below its 52-week high of Rs 1,106.85. Over the past year, it has gained 13.95 per cent, compared with a 3.22 per cent decline in the BSE 500.

Disclaimer: The article is for informational purposes only and not investment advice.