DNA Money Edit: ArcelorMittal's India coming

The resolution process of the debt-ridden Essar Steel has entered the final lap. Lenders, who collectively raised a claim of Rs 49,395 crore, are in for a pleasant surprise as the highest bidder ArcelorMittal promised to sweeten the bid. DNA Money reported that the consortium led by Luxembourg-based ArcelorMittal may cough up Rs 52,000 crore to take over Essar Steel and Odisha Slurry Pipeline Infrastructure.

Lenders are on cloud nine that the auction through the National Company Law Tribunal (NCLT) has helped them recoup nearly 100% of the outstanding non-performing assets (NPAs) on their books. This is the first major case where the banks are able to recoup the most of their bad debts. This is indeed commendable considering the fact that in some cases, lenders have agreed on haircuts as steep as 80% to avoid the company being liquidated. Of course, in Essar Steel's case, the uptrend in the global steel price and healthy domestic demand facilitated the sale process.

For Lakshmi Mittal, the buyout of Essar Steel, which operates a 10 million tonne mill in Hazira (Gujarat), opens up a big market in India, the world's largest steelmaker. His earlier attempts to get a foothold in India, via projects planned in Odisha and Jharkhand, were not successful. Post Essar takeover, ArcelorMittal will become the third largest producer behind Tata Steel and JSW Steel, but it will surely stir up the market with efficiency and cost controls.