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Jindal Stainless (Hisar) fixes record date for merger with JSL; stock up 3%.

Shares of Jindal Stainless (Hisar) (JSHL) hit a record high of Rs 504.55 as they gained 3 percent on the BSE in Friday's intra-day trade after the company fixed March 9, 2023, as the record date for merger with Jindal Stainless (JSL). The stock surpassed its previous high of Rs 494.95 on February 3, 2023.


"The board has decided to fix Thursday, March 9, 2023, as the Record Date to determine the entitlement of the company's equity shareholders for the issue of equity shares of the JSL under the Part B of the Composite Scheme," JSHL said in an exchange filing.


JSHL Board approved the merger of JSHL into JSL with a swap ratio of 1: 1.95. For each share held in JSHL, a shareholder will get 1.95 shares of JSL. The appointed date for the deal was April 1, 2020, and it is likely to conclude in FY2023.


 Meanwhile, shares of JSL gained 1.5 percent on the BSE in the intra-day trade today and hit a high of Rs 274.75. The stock hit a record high of Rs 275 on February 22, 2023.

On the rationale behind the merger, the company said the merged entity - JSL, as an Indian MNC, would enter the league of top 10 global stainless steel producers. This would also pave the way for consolidating the stainless steel business into one entity with a total capacity of 1.9 million tonnes per annum (MTPA). Merger with JSL will help reduce complementing strengths with more robust financial positioning, JSHL said.


Meanwhile, in the past six months, the stock price of JSHL (up 104 percent) and JSL (up 118 percent) have more than doubled at the bourses. The S&P BSE Sensex was up 1.2 percent during the period.


According to analysts at ICICI Securities, JSL is at the cusp of profitability/volume improvement, mainly on commissioning new capacity (1.0mntepa) and removal of export duty. Furthermore, the acquisition of JUSL (Jindal United Steel Ltd) will likely improve margins by ~Rs 4,000/t.


"Taking cognizance of regulatory overhang being removed, we raise our valuation multiple by 10 percent to 5.5x. We also raise JSL's (standalone) FY24E volume to 1.4mnte (earlier 1.1mnte) led by better avenue for exports and improving domestic potential," the brokerage firm said in a report. The stock, however, is trading above its target price of Rs 270 per share.

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ONGC to invest USD 2 billion in Mumbai offshore to raise oil and gas output.

India's top oil and gas producer, ONGC, will invest over USD 2 billion in drilling a record 103 wells on its main gas-bearing asset in the Arabia Sea as it pivots a turnaround plan that will add 100 million tonnes to production, a company official said. Oil and Natural Gas Corporation (ONGC) has three main assets off the west coast - Mumbai High, Heera and Neelam, Bassein, and Satellite, which contributed 21.7 million tonnes of oil and 21.68 billion cubic meters of gas produced in 2021-22.


"We have released a record 103 locations for drilling of wells on the Bassein and Satellite (B&S) assets over the next 2-3 years," ONGC Director (Offshore) it is said.


The wells will tap smaller and hereto untapped reservoirs and help raise output.


"We estimate that this development drilling will enhance production by over 100 million tonnes of oil and oil equivalent gas over the life of the field," he said. "The investment in drilling and facilities will be over USD 2 billion."


ONGC produces two-thirds of all oil and gas produced in the country, and any incremental production would help the government cut its dependence on imports to meet energy needs.


India imports over 85 percent of the crude oil, converted into fuel such as petrol and diesel in refineries, and roughly half of the natural gas used to produce electricity, make fertilizer, converted into CNG for running automobiles, and piped to household kitchens for cooking.


The government has been pressing state-owned firms to step up efforts to raise domestic output to help cut the USD 115 billion import bill.


ONGC, which reported a gradual decline in output for over a decade primarily because its fields are old and ageing, has started working on a comprehensive asset base plan rather than a piecemeal field-centric approach.


He said B&S asset has several fields, including the prime Bassein gas field, D1, and Tapti-Daman. These currently produce 55,000-56,000 barrels per day (2.8 million tonnes) of oil and 28 million standard cubic metres per day of gas.


"We have done a reservoir profiling for the entire asset to planning the drilling campaign," he said; adding new wells will bring additional products to offset the natural decline in older wells and add to the overall output.


The Daman field alone is projected to contribute 6-7 mmscmd of more gas, while the Tapti field may see oil output almost doubling to 30,000 bpd.


 ONGC will adopt a similar approach to rejuvenate the other two assets in the western offshore.


The fourth phase of the redevelopment of Mumbai High, India's most prolific oil and gas field, is almost complete. He said the next step is at the implementation stage, while the sixth is at conceptualization.


ONGC is likely to see a reversal of production decline from the current fiscal. In the current fiscal year (2022-23), crude oil production is slated to rise to 22.823 million tonnes and gas to 22.099 bcm. In the following fiscal year, oil production will climb to 24.636 million tonnes, and 25.689 million tonnes in 2024-25.


Natural gas production is slated to rise to 25.685 bcm in 2023-24 and 27.529 bcm in the following year.

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AP Industrial Policy should be conceptualized along with entrepreneurs.

Andhra Pradesh New Industrial Policy needs to be developed, from concept to commissioning, by taking entrepreneurs on board, it is said.

In a review meeting on structuring the state’s new industrial policy, “Formulate the new industrial policy in such a way that it should hand hold the entrepreneurs from conceptualization to commissioning to marketing their products,” the statement added.

The state chief minister, in the meeting, asked officials to put the impetus on the marketing of products and procuring necessary international linkages. “Micro Small and Medium Enterprises (MSME) has to face tough competition in the world, and they can march ahead if they have only tie-ups with international companies and agencies,” he noted, adding that official machinery should assist entrepreneurs.

Further, he tasked officials to confirm that the new policy meets the demands of entrepreneurs, and in particular, the MSME policy should advise, assist and support startups at every stage.

To cater to startups' needs and set up the industries department office, he directed officials to build a unique facility spanning an area of 3 lakh sq ft amid the port city of Visakhapatnam.

Besides prioritizing startups, the state CM also suggested paying necessary attention to meet the basic infrastructural needs of port-based industries.

Meanwhile, Andhra Pradesh has over 48,000 acres of industrial land banks, 530 industrial estates, 293 industrial parks, 31 MSME parks, six special economic zones, three information technology SEZs, and three of the 11 industrial corridors, said the state Industries and Commerce Minister.

 He was addressing an investor roadshow ahead of the global investor summit slated for March 3-4 in Visakhapatnam, reported PTI. He added that the state has a diversified portfolio of industries such as automobiles, chemicals, aerospace, defense, pharma, textiles, etc., and world-class infrastructure in seaports, roads, startups, and tourism.

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Indian steel industry: Tapered now, tempered for the future, thanks to changing dynamics.

The year 2022 has been a period of major ups and downs - not only for the global equity markets but also for the global economy. With the central banks giving top priority to control inflation even at the cost of economic growth, the global economy paints a gloomy picture for the near future. Some sectors have been hit harder in the wake of the impending demand slowdown.

The global steel sector is one of them. It faced a 4 percent on-year contraction in global steel production, driven by a 2 percent fall in production in China and 7 percent in the rest of the world.

Data shows that apart from China, production in other key regions, such as Europe, too declined 10 percent on-year and the US witnessed a decline of 5 percent. On the other hand, India and the Middle East witnessed a year-on-year growth of 5 percent and 7 percent, respectively.

“Although any sharp production growth is unlikely in CY23, it should be in the range of 1.5-2.0 percent with another healthy year for India and likely turnaround in Europe and North America,” it is said, the Director-General of the World Steel Association (WSA) at an event.

Basson believes that India’s steel industry is better placed than its peers in other countries and should witness the strengthening of fundamentals, driven by better domestic demand, increased export opportunities, limited imports, and firming up of steel prices at healthy levels.

The fact that the exports from China have fallen considerably from the peaks of 2016, the likely closure of 150 million tonnes (MT) of production capacity there will keep the exports from China in a tight range. This would result in a renewed focus on its domestic market and push back the exports.

This is where the Indian steelmakers stand to gain. Even though India may not be able to replace China as the top producer and consumer of steel, its vast domestic market will provide ample scope for growth for domestic steel makers.

Basson is of the opinion that apart from the strong support from domestic demand, the Middle East and Southeast Asia would be key targets for India’s steelmakers for exports in the next 5-7 years.

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Imports of steel minimal; domestic industry progressing tremendously: Steel minister Scindia.

The inbound shipment of steel is "very minimal", Steel minister Jyotiraditya M Scindia said on Thursday amid industry flagging the issue of "cheap imports". "If you look at the numbers, the rise is very, very minimal. Our market is growing tremendously, and our domestic producers are supplying well," the minister told PTI about increasing imports.


According to industry data, finished steel imports rose by 21 percent to 4.77 million tonnes (MT) in 2022 from 3.94 MT in 2021.


The Secretary general of the Indian Steel Association (ISA) said the industry is under the pressure of supply chain issues and increasing raw material prices.


 ISA is the apex industry body of the steel sector.


 He said that the prices of critical raw material coking coal had registered a sharp increase of 55 percent from USD 248 per tonne on December 1, 2022, to USD 345 a tonne on February 15.


"Steel is exported to India by FTA (free trade agreement) countries at lower than their domestic prices, which is nothing but dumping. We have repeatedly been raising the issue of cheap imports with the ministry," it is said.


Coking coal is a critical raw material used in steel manufacturing, and India remains dependent on imports to meet over 85 percent of its coking coal requirement.

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Mining of oceans to unlock huge opportunities for Indian industries.

India is looking to mine oceans, which will unlock tremendous opportunities and new areas of operations for Indian industries, it is said.

Speaking at a conference on the sidelines of the silver jubilee edition of the International Engineering & Technology Fair 2023, the mines secretary said that the government is amending the Offshore Areas Minerals (Development and Regulation) Act, which is open for comments from the industry.

"We need to increase domestic exploration and we have enlisted 13 private exploration companies as the opportunities are immense. We also need to look at acquiring foreign assets. We sent a team to Argentina to identify mines for investments and we have two lithium mines and one copper mine there. Within the coming period, we will shortlist projects to invest in, which will be open to the private sector," it is said.

He also urged the industry to get into organized recycling to make India the recycling hub of the world.


Talking about the opportunities and possibilities in the metals and mining industry, he said that the government had proposed amendments to the MMDR Act to encourage junior miners.


Koushik Chatterjee, chairman of Metal & Metallurgy Expo 2023 and executive director and Group CFO Tata Steel Ltd, said the metals and metallurgy sector is the foundation of India's economic growth and underlined the need to develop a sustainable metals and metallurgy Industry, which is aligned with India's Sustainable Development and Net-Zero goals.


Gajendra Panwar, MD, Danieli India Ltd, said that the industry should build modern steel plants capable of delivering premium quality steel to become globally competitive.


Noting that India needs to become carbon neutral, he said that green hydrogen is a great option to reduce greenhouse gas emissions. "But, until it is available and affordable, we must look for other technologies to use natural gases to bring down carbon emissions," it was added.

Sunil Duggal, chairman of CII National Committee on Mining and Group CEO, Vedanta Ltd, said that the enormous potential of the mining and metallurgy sector needs to be unlocked and added that the industry is fully committed to achieving Prime Minister Narendra Modi's vision to make India Aatmanirbhar in coming years.


Over 400 companies from 19 countries are displaying their latest products and technologies at the IETF. Finland is the focus country at the IETF this year.

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Agreements with 26 companies signed under the PLI scheme for specialty steel.

Agreements have been signed with 26 companies for 54 applications under the production-linked incentive (PLI) for specialty steel, Union Steel Minister Jyotiraditya M Scindia said on Thursday. The minister made the remarks at the Global Zinc Summit 2023 in the national capital, where he also urged the stakeholders to explore investment opportunities in India.


"We had a PLI for speciality steel and that includes steel products with zinc. I report we have awarded 54 applications submitted from close to 26 companies (which will lead to) an investment of...Rs 30,000 crore, a capacity addition of 26 million tonne and employment generation potential of about 25,000 people," it is said.


He said that India is the fourth largest producer of zinc, contributing to six percent of the world's capacity alone, adding that 80 percent of the non-ferrous metal produced in the country is consumed domestically.


In India, the government has announced a considerable capex of Rs 10 lakh crore for infrastructure which has opened tremendous investment opportunities across the sectors. The minister informed the participants of the summit.


"Zinc is consumed in galvanising, structurals, wires, cables and trains etc but there are new markets which represent tremendous opportunities like renewable energy, rural electrification, galvanising rebars. There are new opportunities," it is said.


 The top five steel companies -- Tata Steel, JSW Steel, JSPL, AMNS India, and SAIL -- dominate the list of qualifiers under the PLI scheme for specialty steel. Besides, a few others, like Gallant Metallics, Kalyani Steels, Shyam Metalics Flat Products, and Sunflag Iron and Steel, have been selected under the PLI scheme.


The Union Cabinet in July 2021 approved a Rs 6,322-crore PLI scheme to boost specialty steel production in India.


 Some categories of specialty steel included in the scheme are coated/plated steel products, high-strength/wear-resistant steel, specialty rails, alloy steel products, steel wires, and electrical steel.

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NSC inks pact to trade WTI crude oil and natural gas.

To begin trading Nymex WTI crude oil and natural gas, NSE on Wednesday signed a data licensing agreement with derivatives marketplace CME Group.


With this pact, National Stock Exchange (NSE) would be able to expand its NSE product offering and its overall commodity segment to list, trade, and, settle rupee-rupee-denominated WTI crude oil and natural gas derivatives contracts for Indian market participants.


To launch the additional features of the contract, NSE has applied to seek approval from the Securities and Exchange Board of India (SEBI).


After the SEBI approval, NSE could perform trading in futures of these two global benchmarks in Indian Rupees. The stock exchange also informed that the Nymex WTI Crude Oil and Natural Gas contracts come among the world's most traded commodity derivatives contracts seeking the attention of investors across the globe.


"The Nymex WTI Crude Oil and Natural Gas (Henry Hub) contracts are amongst the world's most traded commodity derivatives contracts generating interest from across the globe," Chief Business Development Officer, NSE, said.


The agreement will help NSE expand its trading impression by broadening its energy basket. Moreover, these contracts will benefit the Indian market participants to meet their price risk management activities. This will also help them in attaining their trading objectives.

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ONGC Dividend 2023: India's largest oil and gas producer declares 2nd interim dividend

Oil and Natural Gas Corporation (ONGC) has fixed the record date for the payment of 2nd interim Dividend to its shareholders.


According to an exchange filing by the public sector company, the Dividend will be paid to the investors if declared by the Board of Directors at the meeting on Tuesday, February 14. The board is slated to meet today to consider and approve the third quarter results.


The state-owned oil and natural gas company has fixed February 24, 2023, as the Record Date to determine the shareholders' eligibility for the second interim Dividend payment. "In terms of Regulation 42 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Friday, February 24, 2023, will be the Record Date for determining the eligibility of shareholders for payment of the said Interim Dividend, if declared by the Board of Directors," the company said in an exchange filing.


Shares of ONGC quoted Rs 147.85 apiece on NSE around 10 AM on Tuesday. The scrip has yielded an average return of around 6 percent in the past six months, while it has declined 11 percent in the past year.


India's largest oil and gas producer is expected to reverse years of decline this year and gradually raise output after that, as it invests billions of dollars in producing from newer discoveries, a top company official said.


ONGC in fiscal 2021-22 produced 21.707 million tonnes of crude oil, refined to produce petroleum products like petrol and diesel, and 21.68 billion cubic meters (bcm) of natural gas, which is used to produce electricity, manufacture fertilizer and as CNG in automobiles.


In the current fiscal year (2022-23), crude oil production is slated to rise to 22.823 million tonnes and gas to 22.099 cm. In the following fiscal year, oil production will climb to 24.636 million tonnes, and 25.689 million tonnes in 2024-25. Natural gas production is slated to rise to 25.685 cm in 2023-24 and 27.529 cm in the following year.


ONGC, which contributes around 71 percent to India's domestic production, has reported a gradual decline in output for over a decade, primarily because its fields are aging. The government has considered giving away ONGC's most significant oil and gas fields to private and foreign companies to boost output, but this has faced internal resistance.

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JSW Steel crude steel production was up 15% YOY in January.

Sajjan Jindal-led JSW Steel on Monday reported a 15% year-on-year (YoY) rise in its crude steel production at 18.91 lakh tone in January.

The company's crude steel production was at 16.46 lakh tonne (LT) in January 2022, the company said in a statement.

"JSW Steel reported highest-ever standalone crude steel production for January 2023 at 18.91 lakh tonne, a growth of 15% y-o-y on a standalone basis," JSW Steel said in a regulatory filing.


According to the company, the production of its flat-rolled products increased by 14% to 14.24 lakh tonnes over 12.47 lakh tonnes in January 2022.


Its output of long-rolled products also registered a growth of 14% to 4.25 lakh tonnes against 3.74 lakh tonnes in January 2022. It added that the overall capacity utilization was higher at 99% in January 2023 from 96% in December 2022.

In its quarterly report, the company reported an 88% decline in consolidated net profit for the December quarter at ₹490 crores, hurt by lower exports. It was ₹4,357 crore in the year-ago period.


The steelmaker reported an operating EBITDA (earnings before interest, tax, depreciation, and amortization) of ₹4,030 crore during the quarter under review, with a margin of 13%.


JSW Steel is the largest steel manufacturer in terms of capacity and one of the lowest-cost steel producers in the world. It is the flagship business of the $22-billion diversified JSW Group, which has its presence in sectors such as energy, infrastructure, cement, paints, sports, and venture capital.

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A merger of seven subsidiaries with Tata Steel is to be completed by FY24, says the CEO.

Its CEO said that the merger of 7 subsidiary companies with Tata Steel is expected to be completed in the 2023-24 fiscal year. In September 2022, Tata Steel's board approved a proposal to merge six of its subsidiaries into itself for more significant synergies, higher efficiency, and reduced costs.


"We had already announced (merger of) 6 companies earlier. (Merger of) one more Angul Energy we announced recently," he told PTI in reply to a question on the timeline for the merger.


However, the CEO said that the completion of the merger depends on the regulatory processes, including NCLT clearances, after which the process is expected to be completed in the next financial year.


"We depend on the speed at which we can go through our regulatory requirements," he added.


Besides Angul Energy, the six subsidiaries to be merged with Tata Steel are Tata Steel Long Products (TSPL), The Tinplate Company of India, Tata Metaliks, TRF, Indian Steel & Wire Products, and Tata Steel Mining and S&T Mining Company.


 When asked about plans to merge the recently acquired NINL into Tata Steel, the CEO said there are no immediate plans.


"As per the terms of purchase with the government, the company is committed to running the new asset as a separate legal entity for three years...after that, we can decide what is best for NINL," he said.


 He also said Tata Steel would first work to complete the merger of these seven entities before its plans to consolidate more subsidiary companies into itself.

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Industrial production growth slips to 4.3% in December.

India's industrial production growth slipped to 4.3 percent in December from 7.3 percent in November 2022, mainly due to the subdued performance of the manufacturing sector, according to official data released on Friday.


However, there was an improvement on an annual basis as the factory output growth measured in terms of the Index of Industrial Production (IIP) stood at 1 percent in December 2021.


As per the IIP data released by the National Statistical Office (NSO), the manufacturing sector's output grew by 2.6 percent in December 2022 from 0.6 percent a year ago. The growth stood at 6.4 percent in the preceding month of November 2022.


Mining output rose by 9.8 percent during the month under review from 2.6 percent in December 2021. Power generation increased by 10.4 percent in December 2022 compared to 2.8 percent in the year-ago month.


As per use-based classification, the capital goods segment recorded a growth of 7.6 percent in December against a decline of 3 percent in the corresponding month of the last fiscal.


Consumer durables output declined by 10.4 percent compared to a contraction of 1.9 percent a year ago.


Consumer non-durable goods output expanded by 7.2 percent, against a growth of 0.3 percent earlier.


Infrastructure/construction goods also posted a growth of 8.2 percent against 2 percent in the same month of 2021.


The data also showed that the output of primary goods logged 8.3 percent growth in the month against 2.8 percent in the same period a year ago.


The intermediate goods output growth declined to 0.3 percent from 1 percent earlier.


In the nine months of the fiscal (April-December), the growth in IIP is 5.4 percent, down from 15.3 percent in the year-ago period.

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Erecting an enduring green-steel ecosystem in India.

By 2030, India aims to be the World’s 3rd largest economy. By ramping up its manufacturing capacity to 300 million tons per annum, India’s steel sector will assume the role of a growth multiplier. However, steel is a highly carbon-intensive sector & contributes ~8% of global CO2 emissions. For India, the sector is responsible for 11% of total emissions or about 250 MtCO2e in absolute terms. This number may rise to 600+ MtCO2e by 2045. Globally, steel is considered a ‘hard-to-abate’ sector. High capital intensity, complex processes, dependence on bulk raw materials, cyclical growth-profitability trends, and periodic over-capacity characterize the sector. Such factors hinder the rapid adoption of carbon reduction technologies that are perceived to add costs to an industry with relatively low-profit margins.


In recent decades, the steel industry has achieved significant reductions in energy input and CO2 emissions intensity. Increasing use of electric arc furnaces (EAFs), as well as utilization of waste heat recovery technologies, have contributed to about 61% reduction in energy consumption per ton of steel produced since 1960. However, more than these improvements are needed to reduce the total absolute GHG emissions from steel production. There remains an estimated 15–20% improvement potential on the energy efficiency front.


Modern steel plants operate near the limits of practical thermodynamic efficiency. Therefore, to substantially reduce the carbon footprint of the steel manufacturing process, the development of breakthrough technologies is crucial. To achieve this, there are fundamentally two pathways: one is to introduce carbon capture technologies in tandem with existing processes to lock in the carbon; the other is to replace carbon with current approaches to close in the carbon; the other is to replace carbon with ‘green-reductants’ such as hydrogen. Efforts are also required to optimize specific water consumption. Several digital solutions and industry 4.0 techniques must be deployed to unlock value and rapid scale-up of green steel sector value chains. A 2022 McKinsey report suggests that over the next three decades, an investment to the tune of USD 4.5 trillion is required to decarbonize production. Hence, a close working relationship must be forged between ecosystem players like governments, regulators, banks, and manufacturers of steel, carbon-capture solutions, and green hydrogen to enable a smooth transition and concurrent demand generation.

In Sweden, major ecosystem players like SSAB, LKAB and Vattenfall have developed a technology to utilize green hydrogen for steel manufacturing on a commercial scale and are planning to introduce it in the market within the next 3-5 years. Back home in India, in partnership with Carbon Clean, Tata Steel has operationalized a 5-tonne-per-day carbon-capture facility. JSW is also trying to leverage the capabilities of its in-house teams to achieve differentiation through ecolabel certifications.

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Govt hikes windfall tax on crude oil, export of diesel, ATF.

The government has hiked windfall profit tax levied on domestically-produced crude oil and the export of diesel and ATF, in line with firming international oil prices, according to an official order. The levy on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) has been increased to Rs 5,050 per tonne from Rs 1,900 per tonne, the order dated February 3 said.


Crude oil pumped out of the ground and from below the seabed is refined and converted into fuels like petrol, diesel, and aviation turbine fuel (ATF).


 The government has also hiked the tax on the export of diesel to Rs 7.5 per liter from Rs 5, and the same on overseas shipments of ATF to Rs 6 liters from Rs 3.5 liters.


The new tax rates came into effect on February 4.


The levy on domestic crude oil and fuel exports is now off the lows it hit last month.


Tax rates were cut at the last fortnightly review on January 17, following softening in global oil prices. International oil prices have since firmed, necessitating a windfall tax hike.


India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super average profits of energy companies. At that time, export duties of Rs 6 per liter (USD 12 per barrel) each were levied on petrol and ATF and Rs 13 a liter (USD 26 a barrel) on diesel.


A Rs 23,250 per tonne (USD 40 per barrel) windfall profit tax on domestic crude production was also levied.


The export tax on petrol was scrapped in the very first review.


The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.


Reliance Industries Ltd, which operates the world's largest single-location oil refinery complex at Jamnagar in Gujarat, and Rosneft-backed Nayara Energy are primary fuel exporters in the country. 


The government levies tax on windfall profits made by oil producers on any price they get above a threshold of USD 75 per barrel.


The levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily different between the international oil price realized and the cost.

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ONGC to ramp up exploration for oil and gas; looks for collaborations.

India's top oil and gas producer, ONGC, is pivoting a four-pronged strategy of ramping up exploration efforts, quickly bringing discovered resources to production, raising recovery from existing fields, and increasing collaborations with experts to reverse years of decline in output, its new chairman said. Oil and Natural Gas Corporation (ONGC) is keen to induct internationally renowned exploration firms as strategic partners under challenging areas such as deepsea and bring-in experts who can help raise productivity from aging and mature fields such as prime Mumbai High, Singh told PTI in an interview here.


ONGC, which contributes around 71 percent to India's domestic production, has reported a gradual decline in output for over a decade, primarily because its fields are aging.


It produced 21.707 million tonnes of crude oil, refined to produce petroleum products like petrol and diesel, and 21.68 billion cubic meters (bcm) of natural gas, which is used to produce electricity, manufacture fertilizer, and as CNG in automobiles.


"We focus on three key areas: deepwater exploration, monetizing the discovered fields on the fast track, and enhancing production from producing lots through enhanced oil recovery and improved oil recovery techniques.


"We are looking for collaborations mainly for deepwater exploration. We are also open to partnerships in the other two areas of the partners bring substantial value additions," it is said.


Technologically, ONGC is strong in shallow waters. "We know Mumbai High like the back of our hands. However, they are welcome if partners can add value to our business. We are looking forward to all such collaborations in the India Energy Week in Bengaluru during February 6-8, 2023," it is said.


While its legacy fields continue to be the mainstay of base production, ONGC is looking to provide traction to develop new fields and schemes for maximizing recovery in mature areas.


The firm believes that Indian Basins have much more to offer, and the recent successes with Bengal Basin and Vindhyan have reinforced that belief.


"Globally, all massive discoveries are happening recently in the Deep Seas. Last week, there was a big discovery in Namibia in Africa and Guyana in South America. Our deepwater needs to be better explored. We hope that we will soon have some major finds in deep waters. We have to discover, and that too in a very aggressive way," it is said.


Aiding exploration is the right price.


"Secondly, since prices are good, we can bring into production whatever we have discovered; either we do it ourselves, or through some private party, we have to figure out a way so that it is done in the common interest of the country," he said. "We need to develop whatever we have discovered."


Singh, the second person from downstream oil refining and marketing to head ONGC in two decades (the last one was Subir Raha), brings a fresh perspective to the company that has traditionally been plagued by slow decision-making given its size.


ONGC is open to giving equity stake in challenging fields; adding giving stake will de-risk and bring capital.


"Third, we have to focus on how to maximize the production of whatever we are producing currently through collaboration," it is said.


"At present, the one big part we have to ramp up, in my opinion, is exploration and collaboration. You explore more, and you collaborate in all the spheres where there is more potential, like deepsea exploration in the eastern offshore," it was added.


Singh said it is only for deepwater or challenging fields that some technology experts can help ONGC.


"Typically, oil recovery globally is around or over 30 percent. In our case, it is still not 30 percent, but rather around 26-27 percent. It's like anything you bring that could add to the oil recovery process. We are developing a proper way to do it," it is said.


The critical thing for ONGC is that it is willing to collaborate, and the India Energy Week beginning February 6, will provide an opportunity to discuss such collaborations with a host of international companies attending the event, it is said.


"People share even Nobel prizes today. Gone are the days when it was conferred only to a single person. This is more about synthesis than analysis," he said, adding that India Energy Week provides an ideal platform for looking at synergies with companies from around the globe.


ONGC, he said, has a more significant role because its objectives are aligned with the national interest. "So, we have to figure out ways that cater to the national interest, which private entities can't do. And it is for these reasons we look forward to collaboration and partnerships in difficult fields."


Asked what needs to change in ONGC, he said speed sometimes becomes a casualty because of multi-functional disciplines governing various spheres of finding and producing oil and gas.


"We have to make sure that we decide fast. On-the-job changes are inevitable; the only thing is that you need to be quick," he said. "Decision-making for PSUs is very colored. So, some delay in that account is obvious but not excessive."


Private companies are high-speed in decision-making. "And our problem is that we have so many variables. Hence, the decision-making could be made better, at least from a speed and rationality point of view," it is said.

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Increased capex to boost domestic steel demand, generate employment: Steel industry.

The increased capex allocation of Rs 10 lakh crore announced in the Union Budget will lead to a pick up in demand for steel and generate employment in the country, the steel industry said on Wednesday. Finance minister Nirmala Sitharaman tabled the Union Budget for 2023-24 in Parliament.


"A significant 33 percent increase in capital expenditure to Rs 10 lakh crore -- 3.3 percent of the GDP -- thrust to fast-track infrastructure development, and the highest ever Rs 2.40 lakh crore for railways will translate into robust domestic steel demand, thus spurring private investments and job creations," it is said.


First- and last-mile connectivity for sectors like steel, ports, coal, etc., with an investment of Rs 75,000 crore, will improve logistics efficiency, it is said.


The Chairman of Metals and Minerals Committee, PHDCCI, and Group CEO, Metals & Mining, Essar Capital, said the overall capital outlay of Rs 13.7 lakh crore would spur the growth of the infrastructure and construction sector in the country, and the direct beneficiary of which will be the domestic steel industry.


The finished steel consumption is expected to be 118 million tonnes (MT) in the fiscal year. It will reach 132 MT in the following 2023-24 financial year.


 JSW Group Chairman Sajjan Jindal said: "The 40 percent increase in the income tax rebate limit from Rs 5 lakh to Rs 7 Lakh is a huge comfort that this budget has given to our middle-income group and is a great step to strengthen their finances."


Terming the scheme to support central and state government and municipalities in replacing their old polluting vehicles as a "master stroke," he said it would boost the manufacturing sector, primarily driven by the auto industry, and bring more efficient machines onto the road.


"This government has been giving a huge push to the infrastructure upgradation of our nation, and an increase in spending on road and rail infrastructure is a testament to their philosophy. This will help maintain the momentum of our economic growth, contrary to the world scenario," it is said.


"There is a more holistic focus on logistics with significant investments in the railways and proposed work on coastal shipping. The Budget also assigns resources for the long-term and important transition to a greener future. The support to the tourism sector and MSMEs were also much needed as these sectors suffered the most during covid," it is said.


Managing Director, Jindal Steel & Power Limited (JSPL), said the government has continued to put focus on infrastructure and construction with a budgetary allocation of Rs 10 lakh crore. This augurs well for the steel and cement industry. These industries will also benefit from the focus on rail and transport infrastructure projects and budgetary allocation to improve urban infrastructure in tier 2 & tier 3 cities.


Secretary-General and Executive Head of the Indian Steel Association said, "We got a pro-growth budget with a significant push to capital expenditure to boost the economy. The Budget will steer India toward sustainable development, with a strong focus on infrastructure spending and financial support to MSMEs."


CMD, Kamdhenu Ltd, said: "The announcements related to 50 additional airports, heliports, water aerodromes, and advanced landing zones to be revitalized will provide the push for the infrastructure sector, which in turn will create steel demand."

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Fuel subsidies are back: Oil companies will get Rs 30,000 cr for holding petrol and diesel prices.

The Union Budget for 2023-24 will dole out Rs 30,000 crore to state-owned fuel retailers to make up for the massive losses they ran because of holding petrol and diesel prices despite the rise in cost in a bid to help the government contain inflation. Finance Minister Nirmala Sitharaman has allocated the money under the head of "capital support to oil marketing companies." It did not explain why the blue-chip, cash-rich oil PSUs should need capital support.


Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) haven't changed petrol and diesel prices since April 6, 2022, despite input crude oil prices rising from USD 102.97 per barrel that month to USD 116.01 per barrel in June and falling to USD 80.92 per barrel this month.


They were holding prices when input cost was higher than retail selling prices leading to the three firms posting net earnings loss. They posted a combined net loss of Rs 21,201.18 crore during April-September despite accounting for Rs 22,000 crore announced but have yet to pay LPG subsidy for the past two years.


That freeze had led to record high losses of Rs 17.4 per liter on petrol and Rs 27.7 a liter diesel for the week ended June 24, 2022. However, subsequent softening led to losses on petrol being eliminated and diesel coming down to Rs 10-11 a liter. Retail rates have yet to be changed when oil prices well to help the oil companies recoup the massive Rs 50,000 crore under-recovery they ran for holding costs.


Sabyasachi Majumdar, Senior Vice President & Group Head - of Corporate Ratings, ICRA Limited, said the budgetary allocation towards capital support to oil marketing companies (OMCs) is Rs 30,000 crore as against the industry's ask of Rs 50,000 crore to compensate for losses incurred on the sale of auto fuels and LPG.


"The Government of India, in October 2022, approved a one-time grant of Rs 22,000 crore to PSU OMCs for losses incurred on the sale of LPG, which only partially compensates for the losses incurred," it is said.


International oil prices have been turbulent in the last couple of years. It dipped into the negative zone at the start of the pandemic in 2020. It swung wildly in 2022 -- climbing to a 14-year high of nearly USD 140 per barrel in March 2022 after Russia invaded Ukraine, before sliding on weaker demand from top importer China and worries of an economic contraction.


But for a nation that is 85 percent dependent on imports, the spike meant adding to already firming inflation and derailing the economic recovery from the pandemic.


So, the three fuel retailers, who control roughly 90 percent of the market, froze petrol and diesel prices for the most extended duration in at least two decades. They stopped daily price revision in early November 2021 when rates across the country hit an all-time high, prompting the government to roll back a part of the excise duty hike it had effected during the pandemic to take advantage of low oil prices.


The freeze continued into 2022, but the war-led spike in international oil prices prompted a Rs 10 a liter hike in petrol and diesel prices from mid-March before another round of excise duty cut rolled back all of the Rs 13 a liter and Rs 16 per liter increase in taxes on petrol and diesel affected during the pandemic.


That followed the current price freeze that began on April 6 and continues.


Majumdar said the budgetary allocation for DBT on LPG (domestic) sales is low at Rs 180 crore in ICRA's opinion, which would be a risk for public sector OMCs in case international crude oil or LPG prices rise.


The allocation to Indian Strategic Petroleum Reserves (ISPRL) is Rs 5,000 crore for building crude oil reserves. The increase in essential customs duty on Naphtha would benefit the refiners as it would increase their sales realizations on domestic sales, it was added.

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Decarbonizing India's steel sector: opportunities and challenges.

The National Green Hydrogen Mission, approved by the Union Cabinet earlier this month, identifies a significant role for green hydrogen in decarbonizing the steel sector to meet India's climate goals.


Steel is a crucial sector of the Indian economy. India is the world's second-largest producer of crude steel and the second-largest consumer of finished steel. In FY 21-22, the sector contributed approximately 2% to the country's GDP and provided about 20 lakh jobs. Moreover, the industry is set for significant growth: the National Steel Policy has set a target to reach 300 million tonnes (MT) of annual production by 2030 from the current level of 120 MT.


 At the same time, it is also an emissions-intensive sector. Direct emissions (not counting emissions from purchased electricity use) from iron and steel production stood at approximately 270 million tonnes of carbon dioxide equivalent (MTCO2e) in 2018, comprising about 9% of total national greenhouse gas emissions. Under a business-as-usual scenario, emissions could increase to around 563 MTCO2e in 2030, with the sector's share in national emissions growing to 14%.



Given this context, efforts to reduce emissions in this sector are essential to put India on a pathway to achieve its net-zero 2070 target. Decarbonizing the steel sector is also necessary from the perspective of the emerging regulatory landscape internationally. For example, the European Union (EU) is set to charge a tariff on carbon emissions from steel imports from 2026 under its Carbon Border Adjustment Mechanism (CBAM), which is expected to be equal to the carbon price paid by European producers in the EU carbon market. As of 2019, the average emissions intensity of Indian steel was approximately 2.06 tonnes of carbon dioxide (TCO2) per tonne, compared to the global average of roughly 1.45 TCO2 per tonne. This could put Indian steel exports at a disadvantage. Without an additional effort to decarbonize, Indian steel exports to the EU could fall by as much as 58% under a CBAM scenario in 2030 (compared to a no-CBAM baseline).



Existing measures aimed at increasing energy efficiency, such as the Perform Achieve and Trade (PAT) Scheme, or for promoting greater resource efficiency and material circularity, such as the Steel Scrap Recycling Policy, will play an important role in halting the growth of emissions in the short-term. However, they will need to be improved to achieve the deep decarbonization required in the medium to long term. Hydrogen-based production technologies and carbon capture and storage (CCS) will likely play a significant role in helping the sector reduce its long-term emissions.



The scope for adopting these technologies depends on how steel is produced. There are two primary production routes: the Blast Furnace (BF) route, where coke is the primary fuel, and the Direct Reduced Iron (DRI) route, where the power can be coal or natural gas. India presently produces around 90% of crude steel through the BF and coal-based DRI routes (with an approximately equal share between the two routes). While hydrogen can potentially replace coal or gas in the DRI process entirely, it has a limited role in substituting coke in the BF route. Therefore, a net-zero production scenario for the sector would require a complete transition to green hydrogen-based DRI steel production and the development of CCS options for the BF route.

Industry players have begun exploring the role of both technologies. For example, Tata Steel installed a 5 tonnes per day (TPD) carbon capture plant in Jamshedpur in 2021, while Jindal Stainless Limited (JSL) has announced its intention to set up a green hydrogen plant. However, there are challenges in scaling up these net-zero technologies.



The first is cost. Do global estimates suggest that the investment for setting up DRI steel plants with upstream green hydrogen generation could reach? 3.2 Lakhs/tonne ($4,000/tonne). Additionally, the cost of green hydrogen at? 300-400/kg ($3.75-$5/kg) is higher than the cost of grey hydrogen at? 160-220/kg ($2-$2.75/kg). Similarly, CCS plants have a high capital cost. Are capital costs approximate for a plant of 1 million tonnes per annum (MTPA) capacity (required for a 1 MTPA BF plant)? 800-1,000 crores ($100-$125 million).


 The second is supporting infrastructure. A good support network for hydrogen storage, production, and transportation must be needed. This network infrastructure will have to be scaled significantly to ensure that the green hydrogen demand of approximately 8 MT by 2050 from the sector is met. For CCS, there needs to be more data on the availability of potential geological storage sites and their capacities. A comprehensive national study to assess these capacities is required. Use cases also need to be more robust in scaling up CCS technology.



The next decade will be crucial for developing confidence in these technologies through pilots and demonstrations and creating the supporting infrastructure for their scale-up. Targeted policy support will help de-risk investments in these technologies and bring out the benefits of economies of scale. The recently announced National Green Hydrogen Mission, which provides financial support? One thousand four hundred sixty-six crores ($183.25 million) for pilot programs across sectors, including steel, is a promising step in this direction. International regulations, such as the CBAM, can provide further impetus to the private sector to accelerate the transition to green steel. To ensure India maintains its global competitiveness in the steel sector while meeting its sustainability goals, industry, and policy action will be essential.

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Budget measures to help India's metal industry outshine China & the world.

The steel industry is one of India's core industries, contributing slightly more than 2% of the GDP. The Indian steel sector outlook, on the back of strong domestic demand from the government and private sectors, is likely to remain firm amid concern about global demand uncertainties in the current fiscal.


The demand projection for the sector is looking strong as the Central Government focuses on strengthening the domestic manufacturing base under the Aatmanirbhar Bharat program presents a substantial opportunity for steel production and consumption in India.


The production-linked incentive scheme, which intends to incentivize the additional steel production in India, is expected to boost particular steel demand in Automobile & Auto components, consumer durables, solar equipment, telecom, etc. Opportunities in different-different Sectors like Automotive, Capital Goods, Infrastructure, airports, Railways, Power, etc. Moreover, over the long term, the National Steel Policy envisions doubling India's per capita steel consumption to 160 kg in the next ten years from the current 77 kg.


It is expected that global demand and prices will remain strong as China will no longer add 50-60 million tonnes to its capacity annually. That country may not export significantly higher quantities to disrupt steel prices globally.


However, India Ratings and Research (Ind-Ra) has maintained a "neutral outlook" on the steel sector for FY23, given high raw material inflation that would result in elevated prices and moderation of volume and margin. With the massive availability of minerals in the country, the metal sector is expected to play a significant role in the country's ambitious plans of a sea of-reliant India and USD 5 trillion economies by 2024-25.


 Further, the ongoing reduction of China's real estate sector, slower-than-expected private consumption recovery, and the continuing tension between Russia and Ukraine have limited the growth prospect. The world is paying a heavy price for Russia's war in Ukraine. It is a humanitarian disaster, killing thousands and forcing millions from their homes.


 The war has also triggered a cost-of-living crisis, affecting people worldwide. When coupled with China's zero-COVID policy, the war has set the global economy on a course of slower growth and rising inflation. Growth is set to be markedly weaker than expected in almost all economies.


We hope for an increased allocation of products from the steel sector to be covered under the PLI Scheme giving the industry a much-needed boost. We also hope there is an increased focus by the govt. To scale up the infrastructure sector in the country, which will have a positive domino effect on the steel sector. A reasonable budget for National Highways will also translate into a positive for us, further propelling the sector's growth.

The industry is already under a lot of pressure due to the raw material price hike; the measures stated above will only help the industry look forward to a healthy growth trajectory for both the industry and the economy.


The essential positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending. The country's consumption expenditure is expected to double from $1.5 trillion in 2020 to $3 trillion by 2030. The government's production-linked incentive (PLI) scheme is expected to provide a thrust to the manufacturing sector in FY2022 and FY2023.


The domestic steel industry, which grew between 5% to 7% on a year-on-year basis, is expected to play a more significant role in enabling India to achieve the 5 trillion economy target by 2025. The recent government policy announcements about railways, roads, civil aviation, gas pipelines for affordable housing, and increased budgetary allocation to this sector would support a relatively solid demand recovery and drive the need for iron & steel products.


So it is pivotal that we have a reasonable budget to help us pip China in the Steel production and consumption race. We remain confident that the Govt. will take the necessary measures to help us achieve that, with the Union Budget being a key component in achieving the objective.

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Rajasthan to have 13 new industrial areas along the Mehsana-Bathinda gas pipeline route.

Rajasthan State Industrial Development and Investment Corporation (RIICO) will develop about 13 new industrial areas along the Mehsana-Bathinda gas pipeline route to give a push to the industrial infrastructure in the state, an official said. These areas will be the hub of furnace-based industries, requiring cost-effective fuel for their production. The gas pipeline will fuel the furnaces, ovens, boilers, turbines, and heaters.


Authorized by the Petroleum and Natural Gas Regulatory Board (PNGRB), Gujarat State Petronet Limited installed the 1,650-kilometre gas pipeline, out of which 1,334 km pipeline passes through Rajasthan. The gas pipeline has recently been charged with natural gas, Veenu Gupta, Additional Principal Secretary, Industries and Commerce Department, said in a statement.


She said that the state is making significant efforts to strengthen the gas grid in Rajasthan to foster green energy and reduce the cost of operations for industries.


Rajasthan is the second-largest natural gas-producing state in India.


Shivprasad Nakate, Managing Director of RIICO, said that the Mehsana-Bhatinda gas pipeline in the state would be advantageous for industrial units for the sectors like ceramic, glass, metal casting, textile, cement, automobile, fertilizer, refinery, and steel, among others.


Both existing and upcoming industrial areas by the RIICO, next to the Mehsana-Bhatinda gas pipeline, would not only generate fresh job opportunities in the state but also boost the state's revenue, thereby aiding in its overall development, Nakate said.


 Within a 5-kilometer buffer zone of the gas pipeline at Udwariya, Pipela Rohida (Abu Road), Bevanja Extension (Ajmer), Renewal (Jaipur North), Bichon (Jaipur Rural), and Malsisar (Jhunjhunu), six industrial areas are proposed.

Additionally, RIICO is looking into the possibility of creating an industrial area in Srinagar (Sawai Madhopur) within a 10-kilometer buffer zone of the pipeline.


Similarly, a 25-km buffer zone of the pipeline is being considered by RIICO for the development of six industrial areas at Kalesara, Masuda (Ajmer), Kankani (Boranada), Manda Phase-4 Extension (Jaipur North), Bittan (Jaipur Rural), Padarli-Sindran-Rani (Pali).


The 63 RIICO industrial areas near the gas pipeline in Abu Road, Ajmer, Churu, Jaipur, Jhunjhunu, Pali, Rajsamand, Sikar, and Sriganganagar are already functional. Therefore, industrial units operating in these existing industrial areas across the state will significantly benefit.

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