Tata Steel plans to completely repay its overseas debt over the next two years using internal cash flows as it continues to prioritize deleveraging while pursuing measured growth, a company spokesperson said.
As of FY26, overseas debt accounted for 18% of Tata Steel’s total debt of ₹92,382 crore, translating to ₹16,629 crore, the spokesperson said in an emailed response to Mint. The figure includes both term debt and working capital borrowings across the company’s businesses.
The company has significantly reduced its exposure to foreign currency borrowings over the past five years. Until FY21, around half of its borrowings were denominated in foreign currencies. By the end of FY26, that share had fallen to 18%.
According to Tata Steel’s annual report, this strategy helped shield the balance sheet from currency volatility. Without it, gross debt would have been higher by about ₹12,500 crore solely because of .
No refinancing plan
The overseas bonds are held by subsidiary Abja Investment Company and mature in January 2028.
“Tata Steel does not plan to refinance this debt and will repay it at maturity,” the spokesperson told Mint in an email.
Following the repayment, the only overseas borrowings remaining on the books will be working capital facilities supporting international operations, the spokesperson added.
The company also clarified that most of the debt originally raised to fund the acquisition of Corus Plc has already been repaid.
“This debt may have a small amount of refinanced acquisition debt, but largely consists of debt raised in the intervening years, to invest in the business,” the spokesperson said.
Balance sheet focus
India’s second-largest steelmaker saw net debt rise from ₹51,049 crore in FY22 to a high of ₹82,579 crore in FY25 amid a period of heavy expansion. However, it reversed the trend in FY26, reducing net debt to ₹80,144 crore.
Its deleveraging efforts are also reflected in leverage metrics. Tata Steel’s net debt-to-Ebitda ratio improved to 2.3x in FY26 from 3.2x in FY25 and 3.5x in FY24, marking its strongest leverage position in three years.
“For the last few years, we have been focusing on the onshoring of overseas debt to mitigate the rupee depreciation risks,” Tata Steel chief executive officer T.V. Narendran and chief financial officer Koushik Chatterjee said in the company’s FY26 annual report.
“As a result, overseas debt now accounts for only 18% of total borrowings, compared with around 50% in FY21.”
Measured expansion
Analysts expect the company’s debt profile to remain manageable despite ongoing investments.
“Tata Steel’s debt is unlikely to rise significantly despite its ongoing expansion plans, as the company is consciously avoiding the kind of aggressive upstream capacity additions being pursued by larger rival ” said Aditya Welekar, metals and mining analyst at Axis Securities.
Welekar added that Tata Steel is focusing on expanding its portfolio of value-added products.
However, a conservative expansion strategy may also have implications for market share growth.
“Tata steel should exhibit limited production growth post FY27, as NINL expansion will take some time to commission and electric arc furnaces would provide limited volumes. As a result, Tata steel is likely to lose market share in India to peers such as JSW,” said Satyadeep Jain, metals and mining analyst at Ambit Capital.
Capacity runway
Addressing concerns around slower capacity additions, Tata Steel said it retains substantial flexibility to expand upstream steelmaking capacity in India.
Existing facilities at Kalinganagar, Meramandali, Neelachal and Jamshedpur provide scope to increase capacity to 45-50 million tonnes. The proposed Maharashtra project could add another 6-10 million tonnes.
While the option to expand exists, the company said the pace of growth will depend on market conditions and financial considerations.
“The question is how fast we want to build upstream and where, based on the demand, based on the balance sheet and many other things,” the spokesperson said.
The company is focused on strengthening its position in attractive, higher-margin segments rather than chasing volume growth alone.
“Tata Steel is more interested in market share in key attractive segments, and wants to make sure that their growing market share in attractive, value-added segments rather than solely pursuing volume growth,” the spokesperson said.
Tata Steel plans to spend about ₹20,000 crore on in FY27, with around 60% earmarked for domestic operations.
The spending will primarily support the expansion of Neelachal Ispat Nigam Ltd., downstream facilities and mining infrastructure.