Please note that this meeting is being recorded. All the attendees' audio and video has been disabled from the back end and will be enabled subsequently. I would now like to hand the conference over to Ms. Samita Shah. Thank you. Over to you, ma'am. Thank you, Kinshuk. Good afternoon, everybody, and to all our viewers joining us today, welcome to this call to discuss our results for the 4th quarter and the year ending March 31st, 2023. I am joined by our CEO and MD, Mr. T.V. Narendran, and our ED and CFO, Mr. Koushik Chatterjee. I will request them to make a few opening remarks before we open the call and take your questions. Before I hand it to them, I will remind you that the entire conversation today is governed by the safe harbor clause, which is on page two of the presentation, which is uploaded on our website. Thank you, and over to you, Naren. Thanks, Samita. Good morning, good afternoon, good evening, depending on where you are. Just a few comments before I hand over to Koushik. Global commodity prices staged a recovery during January-March quarter but continued to face an uncertain and volatile operating environment, similar to the rest of the financial year. While global inflation and rate hike dynamics have been at the forefront, there were fresh concerns about the banking sector in the past few months, which also weighed on the sentiment. Steel prices across key regions were up in March compared to December, with Western markets inching up. I mean, the U.S., it was over $1,000. Key steel-making material, coking coal and iron ore prices continued to be volatile on supply dynamics and weighing expectations about Chinese demand. Overall, the spot spreads have witnessed an improvement in the 4th quarter on a quarter-on-quarter basis and above the FY 2023 average levels, but remain below the levels that we witnessed in FY 2022. The economic activity in India continued to improve, and apparent steel consumption was at 14% year-on-year for the 4th quarter and 13% for the financial year. The year-on-year growth in the financial year is an indicator of prevalent domestic demand and was despite the imbalances created by the levy of export duty in earlier in the year. Tata Steel, FY 2023 has been a year of strategic progress as we continue to align our portfolio with the India growth story. India's crude steel production makes up two-thirds of the overall production for Tata Steel now and should further improve in the coming years. On an absolute basis, Tata Steel India achieved the highest ever crude steel production of 19.9 billion tonnes and grew 4% year-on-year by debottlenecking across sites and ramping up the Neelachal Ispat asset. NINL is currently operating at a run rate of one million tonnes of crude steel plus pig iron on an annualized basis. India deliveries grew mostly in line with the production to surpass the previous best recorded in FY 2022. Domestic deliveries grew 11% year-on-year with record deliveries across segments. Moving to the quarter, our deliveries grew 9% quarter-on-quarter to 5.15 million tonnes and saw steady improvement across sectors, particularly auto and retail. Our net realizations improved by INR 1,700 per tonne and were better than the guidance of around INR 1,400-INR 1,500 per tonne provided during the last earnings call. Sustainability is at the core of our strategy. Tata Steel is committed to net zero by 2045. Our route and pace of decarbonization across geographies will be calibrated for each location based on the local regulatory framework, government support and willingness of customers to pay for the highest cost green label, green steel. We continue to pursue multiple initiatives to reduce our emissions, including a recently initiated trial for injecting large quantity of hydrogen into one of our blast furnaces at Jamshedpur, a global first. In terms of growth, multiple projects are underway across India. We are steadily progressing towards an aspiration of 40 million tonnes in India. We commissioned the cold rolling PLTCM on the pickling line and tandem cold mill, which is part of the 2.2 million cold rolling mill complex at Kalinganagar, and the full hard cold rolled coils are now being produced. This marks the beginning of an improvement in product mix. The continuous annealing line and the continuous galvanizing line will be progressively commissioned in the next year or so. In longs, we are well-placed to more than double the presence by 530 via multi-location growth and are also focused on product mix enrichment by expansion at our downstream operations. Moving to Europe, steel deliveries were at 2.1 million tons in the 4th quarter and around eight million tons for the whole year. The drop in realizations and ongoing upgradation of the cold mill at IJmuiden have weighed on spreads despite moderation in costs. The cold mill upgrade is progressing, and the product mix should improve upon commissioning in the next few months. We have also commenced the relining of one of the blast furnaces in early April, which will be completed in the first half of this financial year. I'm also happy to share with you that Tata Steel has been recognized by worldsteel as sustainability champions for the sixth time in a row and by the World Economic Forum as a global diversity, equity and inclusion lighthouse. Thank you, and over to you, Koushik. Thank you, Naren. Good morning, good afternoon or good evening to all who have joined in. Let me give you a deeper sense of the financial performance of the company. I'll begin with the quarterly performance, which is provided in slide 21. Our consolidated revenue stood at INR 62,962 crores, while our EBITDA stood at about INR 7,225 crores, which translates to a consolidated margin of 11%. At Tata Steel standalone, the EBITDA stood at INR 8,089 crores, which translates to an EBITDA per tonne of INR 16,258. Excluding the FX impact, the EBITDA was higher at INR 8,318 crores and was up more than 75% on a quarter-on-quarter basis. As provided in slide 28, there was margin expansion during the quarter on account of improved steel realization and moderation in costs. Within costs, material costs were down while there was slight increase in the conversion costs driven by royalty expenses and FX impact. On intercompany loans provided over time, the ROI increased by about INR 187 crores to about INR 962 crores due to higher production and notified IBM prices. In terms of FX impact, there was a loss of INR 229 crores versus a gain of INR 571 crores in the 3rd quarter. The EBITDA margin overall improved from 18% in the 3rd quarter to about 24% in the 4th quarter. Further improved profitability was also witnessed at our Indian subsidiaries, including Tata Steel Long Products, which turned EBITDA positive on a consolidated basis within nine months of acquisition of the NINL. At Tata Steel Europe, the EBITDA loss stood at about GBP 176 million and on per ton basis was broadly similar to 3rd quarter. As shown in slide 13, deliveries were up by about 9% quarter-on-quarter. An improvement in cost was mostly offset by the drop in the revenue. During the last earnings call, we had mentioned a drop in revenue per ton of GBP 70 per ton and reduction in the overall cost by about GBP 100 per ton. While the revenue per ton dropped by about GBP 58 per ton, the overall volumes were lower than anticipated, resulting in an absolute revenues being lower than expected. Further, the cost decreased by GBP 60 per ton. While the spot prices of energy have dropped sharply, our energy costs did not fall as much as we had hedges in place. You will remember the hedging for energy cost has helped protect us during the European energy crisis last year. While there was a spike in natural gas and power prices in spot markets, our costs did not increase as much. Spot prices of natural gas dropped sharply this quarter, but the drop in our costs will take a quarter or two to reflect in the profit and loss account. Taxes for the quarter stood at about INR 1,755 and decreased quarter-on-quarter upon lower non-cash deferred tax. You are aware that over the previous 15 months, the British Steel Pension Scheme had completed about three insurance buyouts of its pension liabilities up to 62% with Legal & General. We had previously explained that with each buy-in, a proportion or a portion of the accounting surplus of the pension are so-called utilized to secure the insurance and a non-cash deferred tax charge is recorded in the profit and loss account. We're also guided that we expect this movement to continue till the full de-risking is completed. We can confirm that the residual insurance of 38% of liabilities is currently underway and will be completed in Q1 of this financial year, subsequent to which the business will be fully de-risked from any pension fund exposure. Tata Steel Europe assessed also the potential impact of the economic downturn in Europe on its business outlook. Based on the assessment, Tata Steel Netherlands is expected to have adequate liquidity. Tata Steel U.K. is expected to be adversely impacted. Tata Steel U.K. continues to implement various measures aimed at improving its business performance and conserving its cash and liquidity. The discussions with the U.K. government is still ongoing, but it remains uncertain whether adequate support for decarbonization would be agreed. Given these circumstances, we have taken an impairment charge of INR 1,170 crore in the Tata Steel standalone books, reflecting the investment in the overseas portfolio. Moving to the cash flows. The operating cash flow for the quarter stood at about INR 8,861 crore versus INR 5,020 crore in the 3rd quarter. This was primarily driven by better working capital management. Moving to slide 23, our consolidated revenues for the full year was broadly stable year-on-year basis and stood at INR 240,000 crore or $30 billion. Our consolidated EBITDA stood at INR 32,698 crores, which translate to a margin of 13%. The standalone margin was higher at 22%, while Europe was at 5%, reflecting higher input cost due to inflationary pressures and stressed supply chain. The standalone EBITDA stood at about INR 28,175 crores for the year and translate to an EBITDA per ton of INR 15,467, while TSE EBITDA stood at about GBP 477 million pounds, which translate to an EBITDA of about GBP 58 pounds. We spent about INR 4,396 crores for the quarter and INR 14,142 crores for the full year on CapEx. As Naren mentioned, it was a year of strategic progress with commissioning of the pellet plant and the PLTCM line at Kalinganagar and NINL ramping up to one million tons on annualized basis. In the financial year 2024, we look to deploy about INR 16,000 crores on CapEx, INR 10,000 crores in standalone India, largely focused on expediting and accelerating the Kalinganagar project. There are some subsidiaries like Tinplate, which are also expanding its capacity, and that will also be reflected in that INR 16,000 crores. Also for the Blast Furnace 6 relining in IJmuiden in Tata Steel Netherlands, and we continue to prioritize these strategic CapEx over the next 12 months. The free cash flow generated for the quarter was INR 4,800 crores, and our net debt decreased by about INR 3,900 crores during the quarter and stands at about INR 67,810 crores. For the year, we were successful in maintaining our interest costs despite a 250 basis points increase in the benchmark rate by the RBI and 475 basis point rate hikes by the Fed. Our financial strategy is calibrated to generate returns across the cycle, and our financial matrices remain within the medium-term targets. Net debt to EBITDA is at 2.07x and net debt to equity at 0.61x. We remain committed to our long-term target of deleveraging whenever we generate free cash flow, which is surplus to our needs in CapEx and balance with growth aspirations and move towards a much more healthier balance sheet. We aim to reduce our leverage and resume the deleveraging journey in financial year 2024. As mentioned in the press release, the board has recommended a dividend of INR 3.6 per share. With this, I will end my comments and open the floor for questions. Thank you so much. Thank you, sir. We will now begin with the question and answer session. We will be taking questions on audio and chat. To join the audio questions queue, please mention your full name and email ID in the chat box. Kindly stick to a maximum of two questions per participant and rejoin the queue should you have a follow-up question. We will unmute your mic so that you can ask your question. To ask questions on chat, please type in your question along with your full name and email ID in the chat box. We will now wait for a moment as the queue assembles. The first question is from Sumangal Nevatia of Kotak Securities. Please go ahead. Hello, am I audible? Yeah. Yeah, sorry. First question is on Kalinganagar, five million ton plant. If you could just share some specific timeline as to where are we as far as the commissioning is concerned, and what sort of volume guidance or volume growth we can look in FY 2024 and 2025. Sumangal Nevatia, basically, as you heard from Koushik Chatterjee, we've commissioned the pellet plant and also the cold rolling mill without the annealing and the galvanizing facilities which are going to come up over the next 12-18 months. Basically that's on the cold rolling mill. In terms of volumes will come up in stages. We are adding another caster in our steel mill shop, which will maybe give us 200,000 tons this year because we will better utilize the existing blast furnace. The new blast furnace will not have any impact on this financial year. It will have some impact in the next financial year because it is expected to come around March, April as of now. That's a five million ton blast furnace. You will see some impact of that benefit accruing next year. The full advantage of volumes will come in FY 2026, I guess, right? Because you will get some benefit of volume in FY 2025 and most of that five million in FY 2026. Pellet plant will help us bring down the cost. The cold rolling mill will help us add value, and the blast furnace will help us add the volume. Understood. That's very clear. Thank you. My second question is on the prices both India and Europe. If you could just guide what are we looking at in terms of 1Q versus the previous quarter and also in terms of cost, how are the costs moving? Especially with Europe, we see that the spreads have improved quite dramatically. Do we expect again, I mean, break even kind of profitability in the coming quarters? Sumangal, as far as India is concerned, we are expecting this quarter to be about INR 1,000-1,200 higher per ton compared to the last quarter. Market is still looking for some direction. You know, keeping that in mind, this is what we feel. In terms of Europe, it's going to be about GBP 15 per ton higher this quarter over last quarter. I think I would like to comment a little bit on the cost side. The coal costs are going to be higher this quarter compared to last quarter, both for India and Europe, because you'll be consuming what was bought a few months back. The benefits of lower coal price will accrue to Q2 more than Q1. Coal costs are expected to be about $10, $10-$15 at least higher in both places. In Europe, as Koushik Chatterjee mentioned, we have not got the benefit as yet of gas prices dropping because some of it are the hedges that we've done in the past, which benefited us last year, but hence will not benefit us this year, but will play out over the next two quarters, you know. As cost, actual cost versus the what do you call it? The spot prices will converge maybe in Q2, Q3, more towards Q3. That's the second comment I want to make. Third comment I want to make is Q1 volumes will be lower than Q4. I just want to, you know, want you to keep that in mind, because in India, we've had a few shutdowns. In Europe, while the production will be lower, because one blast furnace is down this quarter, we will use up the slabs. We will not have the cost advantage that you would have in your running full load. The deliveries will be of slabs which are actually produced last year. To that extent, it will also reflect a bit of high cost. While these spreads are, the failed spreads may not increase as much as we would have liked it to this quarter. It'll, I would say, be, you know, pretty much similar levels. Volumes will be lower. Yeah. Got it. Got it. Just one last question, if I may, on this discussion with the U.K. government. I heard the interview that, I mean, you're saying that there's not much progress. Just want to understand, when is the plant reaching end of life, and what is our strategy? I mean, do we shut the plant if we are not satisfied with the support? What timeline are we looking at towards the final decision? Because we've been hearing about this negotiation since quite some time now. Any specific timeline you would like to guide, sir? Basically the assets, the heavy, t here are two types of assets. The downstream assets are fine. It's more the upstream assets which are reaching end of life. Those assets are reaching end of life in the next 12- 24 months. Basically, whenever we feel it is unsafe to run the operation, in discussion with all the stakeholders, we will have to take that call. This is assuming nothing comes out of any of these discussions or nothing close to what we want comes out of any of these discussions. That's where it is. In some sense, we'll have to take a call within the next 12- 24 months on the heavy end if there's no support from the government. Yeah. Got it. Thank you, and all the best. Yeah. Okay. The next question is from Amit Dixit of ICICI Securities. Please go ahead. Amit, we are unable to hear you. We request you to please send in your question via chat. We will now move on to our next question. The next question is from Prashanth P. of Emkay Global. Prashant, please go ahead. Thank you for the good set of numbers on the India front. My question is regarding the European operations. Now, it's been 15 years. We've done all the hard work. We've shown the integrity, commitment, and compassion all together. Now, we are in a situation where in U.K. as well as in Netherlands, in U.K. we either need it for the end of life situation or in Netherlands for the relining and then the transition of one of the blast furnaces and later for the next one. Eventually over the. We will need government help in both of the countries. Sir, if you closely look at what the situation, we may be in a situation wherein the government will only calibrate their help such that even if we are making good margins, they will calibrate their help so that we never make any free cash flow at all, maybe for the next 20-25 quarters if you look ahead. In this situation, is it not a good idea to say quits, no? We've given, we've given all our blood and energy. Is it not a time to say quits, as in? Prashant, couple of co-comments, right? I mean, firstly, I think we need to separate the Netherlands and the U.K. businesses because they are very differently positioned. The Dutch business has traditionally been one of the strongest steel businesses in Europe. May not have been so visible because it's always under Tata Steel Europe. But, just to give you a sense, last 15 years the Dutch business has not had to seek any support from the India side and, you know, has been able to take care of its own needs. We expect it to continue to do so even the year which has gone by is an EBITDA positive year, a cash positive year. Obviously not in all quarters. Because of the blast furnace relining, we have a challenging quarter or two. Fundamentally the business is strong. Even if we were to transition, yes, we need support from the government. Also the Dutch business generates its own free cash flows, unlike the U.K. business. The government support is important, but also because other governments are supporting other steel companies, we also want to make sure there's as close to a level playing field as possible. For those reasons, we will seek support from the government. It's not like it is in the U.K., where the cash flows of the business don't support the transition, the cash flows of the business don't support, you know, investment in the end of life assets. There the call is in some sense more urgent. We will, l ike I said, we have to discuss with all of the stakeholders, including the unions and everybody else. We will take the right call at the right time. Koushik, I don't know if you want to add anything to my response? No, that's fine. I think what you have summarized is the most relevant. I think these are two different businesses which will have two different paths. As Naren mentioned, he's actually giving you a timeline of 12-24 months. I'm sure we will come back to you when the time comes and talk about our plans in details. Sure, sir. Just before that, sir, I, you know, the reason I clubbed both these together is that just for U.K. there may not be any takers. Only if we put them together as a Jodi, there might be some interested suitors. That's the reason I clubbed the two together. Sir, the second question is regarding, you know, now given where the coking coal costs are and the other cost structure is, can we expect some more working capital release in the coming couple of quarters? Yeah, I think we have seen a significant working capital release in the last quarter. We are watchful about it, but we are taking not just depending on the price, but also on the efficiency factors on working capital. Each of the sites, each of the units, and on consolidated basis, we are looking as to how to drive working capital, even better. I think some of our working capital elements, like datas, et cetera, are really at the lowest level. Given the long supply chain, especially in Europe, and elsewhere, we will look at working capital release through the year. This quarter also, when, in Netherlands, they would release the slab stocks for the sales, there would be some release. Working capital is high on the agenda because that's something that can generate internal cash flows for the business. Understood, sir, and thanks, and wish you all the best. Thank you. Thanks. The next question is from Pinakin Parekh of JP Morgan. Please go ahead. Hello. I just wanted, you know, clarification in Europe that what has been the cash burn at Europe over the second half of FY 2024, FY 2023, between U.K. and Europe? Hello, am I audible? Yeah, you are. Sorry. I think. Just wanted to understand. Yeah, sure. Go ahead, Pinakin. I just wanted to understand what has been the cash burn in Europe between U.K. and Netherlands in the second half of fiscal 2023? The interest payments, then the CapEx, the inventory build, what would have been the total cash loss over there? In the U.K., we normally have a burn of roughly GBP 100 million-GBP 150 million in six months' time. In Netherlands, actually, they are sitting on a cash of about EUR 600 million. There is no cash burn as such from Netherlands. Of course, when there are cycles of, you know, when energy prices increase, they will draw on working capital, et cetera. Otherwise they are sitting pretty on more than half a billion euros of cash. Just to continue for FY 2024, the CapEx guidance is INR 16,000 crores, consolidated INR 10,000 crores stand alone. That implies broadly INR 6,000 crores. Now, how much of that would be in Europe? As a consolidated entity, how much would Europe be able to fund of that CapEx, and how much would be required from India? No. Let me explain. I said INR 10,000 crores is stand-alone India, which is Tata Steel Limited. Okay. Of which about 70% would be on the Kalinganagar Project and 30% will be sustenance and other projects. When I say Kalinganagar, I'm also including the raw materials which are linked to Kalinganagar. That's the proportion as far as India stand-alone is concerned. As I said, there are other Indian subsidiaries which are actually on an expansion mode, be it The Tinplate Company of India, be it metallics and others. That's about INR 2,000 crores, and all of them are value accretive. The Tata Steel Netherlands is going to spend about INR 3,000 crores, and this will be spent completely on their own. Of the INR 3,000 crores, INR 1,100 crores is kind of one-off in the blast furnace reline, and the rest of it is actually sustenance, environment and improvement projects. All of this will be spent by Netherlands from its own cash. As far as U.K. is concerned, we are somewhere between, say, INR 600 crores-800 crores, which is again the critical CapEx license to operate, safety compliance and so on. This is broadly the mix that you see in as far as the INR 16,000 crores is concerned. Thank you. Just lastly on the U.K., one of the key investor concerns we get is that, what kind of shock can a Tata Steel shareholder expect, in 12-24 months from U.K.? What are the two extremes in terms of capital support which would be required if either, the company goes ahead, to fund the new investment or it has to shut down operations? Is it a hundreds of millions of GBP number? Is it billions of GBP? It's that uncertainty which is, you know, really creating concern. Can you give us some color over there? Yeah, surely. So I think, you know, as Naren mentioned, that it is not one bucket. It is the downstream assets are good assets. The distribution is an important part of the U.K. market. That's good. There are other value-added products which comes out from the downstream. They are not reaching end of life, they can certainly continue. When we are looking at the upstream facilities, I certainly think it is hundreds of millions and not billions. That much of a point I can make. Secondly, it is also a question of addressing it in an orderly manner. Therefore it's not a shock that we would be looking at least from a cash flow point of view. It is how do you orderly address that issue depending on the conversations that happens with various stakeholders, and which includes the government, which includes the unions and other stakeholders. We will have to find an alternative where the volumes continue from a downstream point of view. If there is a solution to it which comes in between. We will see as to how it is to be. Any incremental investment on a new asset will have to be value accretive. It cannot be one which does not have an investment case. Understood. That's very clear. Just to lastly, the company goes back to deleveraging, but I missed the target, but can we expect back to the old target of $1 billion a year? I mentioned that. I think that is the, you know, Last year's volatility, performance in the markets, et cetera, meant that we had to hunker down on creating the cash flows. Also we did the Neelachal acquisition, which itself was about INR 11,000 crores, along with some of the downstream, ferro alloys business. All taken together, it was INR 12,000 crores. We expect to resume the same this year at about INR 8,300 crores, about $1 billion, for the full year. It may not be equally paced, across the year. It will be more H2 period when we will have the ability. Just now, honestly, our biggest priority is to allocate capital for Tata Steel Kalinganagar, because that is the most value accretive capital deployment that we can have at this point of time. Understood. Thank you very much, sir. Thank you. The next question is from Satyadeep Jain of Ambit. Please go ahead. Hi, am I audible? Yep. A couple of questions. Firstly, on Europe. I think in the accounts it's mentioned, that TS Global Holdings is looking to provide letter of comfort on refinancing of U.K. debt. Given we are looking at different opportunities and options, in the next 12-24 months, would it be prudent to take on that debt and refinance at the TS Global Holdings? What's the thought behind that? Tied to that is you mentioning that the downstream assets are in a much better shape. I understand the conversations with the government, whatever the headline figures are, about GBP 1 billion-GBP 2 billion are tied to some support for downstream also. That kind of figure, I'm guessing, cannot be just for upstream. If downstream assets are in good shape, does the company need that support from the government for downstream also or is support for upstream sufficient? That's the first question on Tata Steel. If I can take this question and then. Yeah. Fundamentally the letter of comfort is not something new. It is. First of all of the debt is reflected in the consolidated balance sheet, so it's not a new debt that we are taking on. Over the last few years, as we've been deleveraging, especially in 2021 and 2021-2022, we have actually paired off the debt from the overseas subsidiaries and that has been our focus because we that's the weaker part of the business from a cash flow point of view and therefore those debt has been taken out as much as we could. That's what we have is the remnant of that debt, which originally was much larger. This letter of comfort is more from a going concern point of view, audit requirements, et cetera. Honestly, we have supported that company for 15 years. This is not going to add any additional burden on Tata Steel because it's the debt which is already reflected in Tata Steel books. One shouldn't kind of worry about it. Even when we look at the orderly transition, this debt is essentially Tata Steel debt. Second part of it is, you talked about the government support and, on downstream, et cetera. Actually, what we have asked the government is a full kit, which is upstream, midstream and downstream. That's the, i f this has to transit, it has to transit through the EAF route. That EAF includes a steel making, it includes the TSCR, which is the hot strip mill, and the downstream will continue. It is the upstream and midstream, which will then feed into the downstream. Therefore this INR 1 billion-2 billion is not INR 1 billion, it is more than INR 1 billion. That project size was an integrated project. It was not just parts of the project. I don't know if I've been able to clarify, but fundamentally it's been a new configuration in an integrated manner. Just a clarification question on on the first part. We do understand that Tata Steel TS Global Holdings had historically provided letter of comfort, refinance certain debt. Given you are now looking at a situation where there could be a hard decision maybe 12-24 months down the line, would it be prudent to take on that debt at the TS Global Holdings or to keep that debt at TS U.K.? And then depending on what that action is, that debt, those debt holders can also bear that liability or whatever that is based on that decision? Or what is the thought process behind refinancing that debt? No, I think that's why I stressed upon the point on orderly transition in whichever way we do. It is, you know, these debt are essentially debt out of our relationship banks, and we have taken the debt over many years. One of the things that Tata Steel and indeed Tata Group doesn't do is to leave the lenders in the lurch. I think that is something which is fundamental. You can say that how do you minimize the exposure by pairing off the debt or pairing off the liabilities that you have, which is what we are working on at this point of time. I think it would be unfair for lenders to kind of bear this as a part of it. Therefore we are, typically, principally always in the zone where we honor, the stakeholders who've provided capital. Fair enough. So second question on the CapEx. Of the INR 10,000 crore you're looking at, KPO 2, INR 7,000, let's say, for KPO 2 in FY 2024. How much has been spent on KPO 2 in the last, maybe two odd years, including the budgeted amount you're looking at for FY 2024? Is there any capital cost inflation compared to initial estimates or is it largely in line? There's a lot of capacity coming online in flat steel in the next two years. Given, Europe is also looking at Carbon Border Adjustment Mechanism, do you think, where do you think the outlet for that, all that capacity for flat steel could be? Which markets could you be looking at for that, for that product? I'll answer the second part and Koushik can address the first part on how much we've spent so far on Kalinganagar. You know, if you look at Kalinganagar five million expansion, there's a 2.2 million ton cold rolling mill coming with it. Actually we will go through a time when we'll have less HR than we've had because most of the HR will get converted into cold roll. We think the cold roll market will continue to be strong because of auto demand and many other cold roll applications. The incremental HR that we will sell even after the expansion is not significant. Secondly, we've always sold 85% of what we produce, or oftentimes 90% of what we produce in the domestic market. If the domestic market is growing at seven million tons a year or eight million tons a year, then again, this incremental volume that we add, we don't see much of a problem. I know others are also adding capacity, but I think we are quite confident about our reach and equity and relationships and product pipeline, et cetera. I don't see a volume pressure. Exports will always be exercised more as a strategic option for us, 10%-15%, but balance should not be a problem for us to sell in the domestic market. Yeah. Koushik? I think the first in the last few years we have spent about INR 17,000 crore on the Kalinganagar expansion, of which about INR 6,500 was in the last financial year. We will do the similar numbers in this financial year. The project is broadly in line. I think the issue is more in terms of we had slowed down the project for a year or two. Other than that, it's in line. The next question is from Alok Deora of Motilal Oswal. Please go ahead. I think Sir Alok is not audible. Maybe we go to the next one. All right. Yes. Alok, can you hear us? Yeah. Please go ahead. I just had a couple of questions. First is on coking coal. What was our consumption cost for the quarter, and how do we see that. I think you mentioned about $10 higher for the 1st quarter, but with the current pricing now at around below $250, what is the benefit we are looking at in the 2nd quarter? Yeah. Alok, the coking coal, if I look at it from an India point of view, for 4th quarter it was around $267, I think, consumption. Now it will be at around $277. These are FOB prices actually, so you need to add the freight. Basically we are seeing $10 increase in Q1 and if you look at the purchase, we are buying on an average just, I mean, at least so far this quarter, at about $25 less than what we bought last quarter. That will certainly accrue and if the coal prices keep softening then of course it'll accrue more. I think minimum of $25 drop for next quarter and hopefully more if the coal price continues to stay soft. This is for India. For Europe, it's about $7 higher for this quarter compared to last quarter, and purchasing is at about $35 lower than last quarter so far. Sure. Also, if you could just indicate, we are seeing pretty sharp correction in global steel prices, you know, across several geographies in the last couple of weeks. What is the sense you're getting and how do you see the price, you know, shaping up in near to medium term? I mean, we have seen pretty sharp cuts across the board, be it iron ore, coking coal, steel. I mean, just your thoughts on that would be helpful. Yeah. Obviously, a lot depends on what's happening in China. I think if I look at the last few months after China removed its restrictions in December, there was a lot of burst of optimism and everyone thought the Chinese economy is going to take off and which was reflected in steel prices and everything else, coking coal prices, everything else. I think few things have happened since then. One is, of course, China is expected to grow at 5%+. Mm-hmm. China is shifting more and more to consumption-led growth, which need not be as steel intensive as the traditional investment-led growth that China had. Second point is as Chinese industry, steel industry particularly, ramped up in anticipation of growing demand, they were almost producing at their highest level. If I remember right, they produced 96 million tons or something in March and exported. Hence they also exported eight million tons, which is higher than what they've done for a long time, which had an impact on the global sentiment, because suddenly an extra two million tons of co-Steel coming out of China at a point in time when the rest of the world was still a bit fragile didn't help the sentiment. The coal prices, et cetera, kept dropping because, firstly, I think China has also developed other sources for coal in the absence of buying coal from Australia. It's not necessary that they need to buy all the coal that they used to buy earlier from Australia. So we're seeing coal prices a bit soft. When coal and iron ore drops, this happened in China, steel prices dropped because the margins were reasonably good. Now I think where we are currently, there's not much margin for the steel companies in China. I don't expect this level of exports, or prices continuing to drop, at these kind of coal prices. You know, if coal prices goes below 200, that's a different matter. Right? Globally, of course, input costs are settling in, like we said, gas prices in Europe, energy, electricity prices. We also feel that as some of those prices drop, some of the user industries who are suffering in Europe because of very high energy prices will have a slightly better situation. I mean, while overall, yes, there is still some fragility, I think we feel that this year should end up better than last year for, you know, for us. Overall, we don't see the volatility that we saw last year when coal prices went to $650 and then dropped, and steel prices went to $800, $900 and then dropped. It's a little bit more within the normal band of $500-$700 that it's fluctuating. Yeah. Sure, sir. That's all from my side. Thank you and all the best. Thanks. The next question is from Vishnu Kumar of Avendus Spark. Please go ahead. Please go ahead. Hello. Yeah, Vishnu, we can hear you. Hi. This is Vishnu from Spark. Yeah. I just wanted to understand what will be the effective production we should be expecting from USF this year, considering your realized activities in them? FY 2024 you mean compared to? Yes 2023? Yeah. FY 2024. That's right. Yeah, FY 2024 will be a million and a half higher than FY 2023 on a consolidated basis. Specifically for Europe, given that we will be taking some shutdown for this maintenance. Yeah. I'm talking of deliveries. While we had a production shutdown in Europe, actually, last year we produced more and sold less because some of what we produced was slabs, which is stocked up. This year in Europe we will, particularly Netherlands, we will produce less obviously because the blast furnaces will be down for four months. We will sell more than we produce because we'll roll those slabs into hot rolled coils and sell, and which will release working capital as well as give us more sales than production. When I say 1.5 million, it is sales, not production, and half of that will be in Europe and half of that will be in India. The next question is from Amit Murarka of Axis Capital. Please go ahead. Good afternoon. It's just on Europe again. Like, we used to maintain that there's not going to be any cash support from India, but now with this, the TS Holdings providing some support to the previous TS U.K. debt, is it essentially like some change in policy or stance that we are kind of having on that front? Amit, this cash and this letter of support has been in place for possibly a decade. It's not something. It is neither a guarantee nor a binding letter of comfort. This is, as I said earlier, it is required for audit purposes. Because when you do the going concern testing, there are various stress tests that are done. One of the stress tests is that if the company does not have the ability to support or refinance the loan that comes due, and these loans are fundamentally working capital loans. If that is, that comes up for renewal, et cetera, then will there be a support from Tata Steel? That is a intent letter and not a guarantee. That is, nothing has changed between what has been given in the last decade versus today. It's more explicit today because that's the part of the stress test that has been done. I think there is no change in policy. We focus on the businesses to ensure that they are cash neutral to cash positive. In Netherlands case, the focus is to push them towards being or the way the plans are done is to become cash positive, which is one of the reasons why I mentioned that they're sitting on half a billion euros of cash, free cash. In case of U.K., it is essentially working within the means to be cash neutral. That is how we look at it. Pending the outcome of the discussions with the government and the more strategic call on the U.K. upstream, this is the status that has been carrying on. Okay. Understood. Also, like, I had a question on the India standalone business from a Q4 perspective. This quarter we have seen a quite a sharp drop in RM cost on a QOQ basis. While coking coal is down a bit, but it still doesn't explain the big drop on a QOQ basis that we're seeing. Could you help better understand that fall? One was royalty, I know. That's been the Iron Ore royalty, which is the re-notified prices of the IBM. We can explain it and give it to you specifically. It's largely. Yeah, it's largely that. You know, we have the royalties come adjusted with a lag, and that's why you're seeing some of the benefit in this quarter. Could you quantify that? Because I guess this will be a bit of a one-off in nature in that sense then? No, no, it's not one-off in nature. It goes through the ups and down. The IBM prices are notified with a lag, that affects it. At times it goes up, at times it goes down. It is also benchmarked to the international prices, but there is a significant lag associated with it, and that's what happens. Unless the royalty rates are revised, which is a very different thing, which is what has happened in the past. The royalty rates have actually gone up significantly in the last few years. The benchmark rate also moves along with the lag, and I think that is the, that is what can happen every quarter or any time. That is what you are seeing it at this point of time. Maybe Samita can give the exact number. Okay. Okay, sure. Thank you. Thanks. The next question is from Ritesh Shah of Investec. Please go ahead. Hello, am I audible? Yes, please. Yep. First question is on ESG. Can you, if I go back to September 2021, I think the company had a release stating IJmuiden operations opts to opt for hydrogen-based DRI. And the current press release we have indicated about injecting hydrogen into blast furnace. Just wanted to understand thought process on hydrogen-based DRI for IJmuiden, economics gas versus green hydrogen. And the same thing, on what scale are we doing at Jamshedpur operations right now? That's the first question. Okay. Should I answer that? Yes. You can answer second. Yeah. Okay. You know, when you look at making steel with a lower carbon footprint, there's gonna be a bouquet of solutions, and it depends on the context and the geography and the regulation. A lot of work is going on. The whole plan in IJmuiden is convert from coal to gas, and then when hydrogen is available, convert from gas to hydrogen. Which means you eventually shut down the blast furnaces and build gas-based DRI production where you will substitute the gas with hydrogen. When you look at India, the challenge we have is most of the steel capacity, not only for us, but for the industry, will be in Eastern India because that's where the iron ore is. We don't see too much of availability of gas, at least at the scale at which we want or hydrogen in the near future. Right? It may be 10 years later, 15 years later, we don't know. Till such time, we cannot just be static, and hence we are looking at various other options. Injecting hydrogen into a blast furnace is addressing the problem to some extent. You can't replace the coal with hydrogen in the blast furnace. You can replace some of what we call the PCI with the hydrogen, and even that needs to be done very carefully because. That's why, you know, the amount of hydrogen we injected was higher than what anybody else has done, and that's why it's caught a lot of attention globally. We have in our E-furnace, which is a 500, 550 cubic meter blast furnace, a smaller blast furnace in Jamshedpur, injected hydrogen for about four to five days, which gives us a lot of data and a lot of information which helps us go to the next level of scale. In India, we will keep exploring these options to reduce the carbon footprint of the blast furnace route. In addition, of course, as you know, we are also setting up a scrap-based, recycling-based unit in Ludhiana, which will be more about recycling and no coal, et cetera. Europe, the transition, particularly Netherlands, will be in this direction. More replacing the blast furnace. Netherlands, I went through some research. Again, we are whatever we have indicated in past, it's contingent to the government support. Yeah. What's the level of confidence that we will have some support from the government? Not that, we see, something what's happening in U.K. What, what gives us comfort? We understand it's one of the best furnaces on carbon intensity. There aretwo, three things. One is, of course, the conversations in the government, from the government indicate that they will be supportive. What is the extent of support, we haven't concluded yet. Secondly, our transition to hydrogen is also very important from the Dutch government's hydrogen ecosystem point of view because we will have one of the biggest offtakes of hydrogen if we convert to a hydrogen-based usage. When the Dutch government is building infrastructure for hydrogen, we are a very important part of the plans. Thirdly, the Dutch asset also generates. It's always been free cash flow positive, unlike the U.K. The Dutch assets has its own ability to support a lot of the transition. Of course, we need support from the government, but the situation is not as dire as one would have seen in the U.K., where the cash flows of the business don't support the transition at all. Here, the cash flows of the business can also support the transition. Sure. I just have one question quickly on P&L and one on balance sheet. This is for Koushik, sir. You indicated NSR increased by INR 1,700 on a sequential basis. If you look at the blended number, if it was simple math, the increase comes at INR 5,400, INR 4,500 per ton. How should we look at the gap of INR 4,500 versus INR 1,700? This is on a per ton basis sequentially. Which slide are you referring to? Probably I can take it offline. I'll check with Ritesh or Pawan. Yeah. Ritesh maybe will speak because, Sure. If you look at my income from operations is INR three and a half thousand, but, you know. That's right. We are just talking about NR when, you know, when we're talking about INR 1,700. Okay. The income is INR 3,677. Maybe it will break it up between the NR and the other incomes. Sure. Sir, last question is what prompted impairments for U.K. right now? How should we look at the next testing? What will prompt more impairments? We just checked the balance sheet. I think the exposure, via loans and investments, it's upwards of INR 20,000 crores. How should we look at this number going forward? This is part of the, again, the year-end, you know, as per the accounting standards, there is always a review of the investments across any company, I guess. I, in our case, we do it either on a six-month basis or a year-end basis, and that is based on the value and use assessment of that unit. As Naren mentioned, that as the business would be, the part of the business, the upstream and the midstream businesses coming towards a end of life in some time, we have to moderate the future cash flows and earnings and costs and so on. That was the basis on which the investment, the PPE in Europe, in U.K. in particular, has been written off many years back to a very low number compared to its original number in 2016 or 2070. What remains is the investment in the standalone books of Tata Steel, and that investment has been calibrated down by about INR 1,100 crores in the standalone books. You know, as we move forward, this will get tested again at either quarter end or six months end. The assumptions will not change much in quarter to quarter, but certainly six months period, it will be reassessed. And that's the discussions which we have internally along with the auditors. The outcome of that will have to come about. A s I said, the PPE numbers are not something which is very significant. It is there, but it has been significantly impaired over the last six, seven years. We have done deep restructuring of the assets also. This is something that will continue to be assessed at every period end. Sure. This is helpful. Thank you so much. The next question is from Kirtan Mehta of BOBCaps. Please go ahead. Thank you, sir, for giving this opportunity. Couple of questions from my side. Just to take on the books, would you be able to clarify the investment numbers that we have in the books of India towards U.K. and Europe? Would it be possible to sort of give us that break-up as well? Well, you have to look at the balance sheet when it comes and see the investment numbers. Those investment numbers are largely re-reflecting Europe. I think that is how we give it. We don't give U.K. and Europe separately because it is flowing from Tata Steel India into the overseas holding company, which essentially holds these two business apart from Canada. Right. Just one more thing in terms of there has been a mention about the delayed ramp-up of cold mill at IJmuiden. Would you be able to sort of clarify its capacity and potential contribution to the margin for the Netherland plant once it comes up? It's an existing plant which had an upgrade. I think the capacity is over 1.6 million, if I remember right. It's an existing plant which was being upgraded, and there were some problems post-upgrade, and one of the subcontractors who was involved went bankrupt, and so there had to be alternate measures taken, et cetera, et cetera. There were some complications, because of which the ramp-up post the upgrade did not happen at the speed that we had wanted. Now we are working very closely with the main contractor and we are improving week on week. We had to announce force majeure because that mill was supplying to a lot of auto customers, so that we gave them enough notice to plan alternatives. I think we are close to a stage where we will withdraw the force majeure because there's a lot more stability. It was more a mix impact than a volume impact because if you didn't produce cold roll then you sold it as hot roll or whatever. I think the impact, maybe Samita can clarify. I think it was about INR 70 million quarter or something like that. Yeah, it was partly reflected in the last quarter and also. Right. Right. in this quarter. That's also part of the reasons why the numbers were not so great for the last two quarters and, you know, because the product mix was worse than what we would have normally done. Right. Understood. One more question, if I may. In terms of the India business, we recently did around INR 16,000 per ton on the standalone operations. When we want to look at this number in the sustainable context or more in terms of the average margin over the cycle, how far we are from the cyclical margin, and how should we think that margin would change as we commission the pellet plant as well as the cold rolled mill there? Normally we look at a long-term margin of around INR 14,000-INR 15,000. You know, that's how we, when we plan long term, we look at it, because that's been our numbers if you look at the worst quarters, not on a quarterly basis, but on an annual basis, right? It will fluctuate. We've seen INR 30,000, we've seen INR 7,000. You know, if you see last year, despite all the challenges, we are still in that range. Right. I'm talking of the standalone, not the consolidated. Pretty much INR 15,000 is close to the range, but slightly higher than the range. Right. Would you be able to add color on that how this sustainable margin of INR 15,000 could change with the commissioning of the pellet plant as well as the cold rolled mill? Obviously, the pellet plant and cold rolling mill is impacting. The cold rolling mill is two million tons of value add in a 21 million mix, right? The pellet plant is, you know, adding about six million tons of pellets. Pellet plant cost advantage depends on the pellet price. If the iron ore price is higher, then the gap is significantly higher. I would say typically INR 800-1,000 crores a year is what we would get a benefit of the pellet plant. The cold rolling mill, again, normally if you look at the HRC-CR gap on a long-term basis, you would look at $100, though just now it is lower than that. If the gap is lower, then the benefit is lower. If you go on a $100 basis, plus I think the advantage we'll have with this cold rolling mill is it'll be really one of the most advanced cold rolling mills in the world. In terms of the kind of product mix, it helps us get into the very high-end auto, et cetera. You know, it gives us a high end of the margin rate. Both of these will be value accretive, will help push the EBITDAs beyond INR 15,000 on a like-to-like basis. The next question is from Mudit Bhandari of IIFL. Please go ahead Mudit, we are unable to hear you clearly. We request you to please send in your question via chat. I would like to hand over the conference to Ms. Samita Shah for the chat questions. Over to you, ma'am. Yeah. Thanks, Kinshuk. The first question is on the ramp up of TSK phase two, which I think we've answered. The other question on TSK phase two is how much raw material integration will be there, especially for coking coal and iron ore for this five million ton expansion? Sorry, Samita, I missed that. Can you just- Yeah. Yeah. The question is on TSK phase two. Yeah. What will be our material integration for the five million tons coking coal and iron ore? As far as iron ore is concerned, you know, all the iron ore that we need, we will produce ourselves. We are fully integrated. The expansion of the iron ore, you know, production continues. I think this year we are around 36-38 million tons, we are on track to expand as fast as the need of iron ore is concerned. The goal is not to buy any iron ore or pellets in the market. Coking coal, we are typically about 50%-20% coverage, because we can't expand in coal as fast as we can do in iron ore. We are in the middle of an expansion in West Bokaro from the current level, you know, of about six million tons of raw coal to about 10 million tons. Six million tons of raw coal means about two and a half million tons of clean coal. Taking it up to about four to five million tons of clean coal is what we're working on. By which time our steelmaking capacity would have also grown. 15%-20% is the range at which we will be in, quote, West we are currently importing and will continue to import. Thank you. The next question was on coking, coal consumption costs, which I think we've answered. There are a lot of questions on, Europe and TS U.K. What is the rationale for the impairment right now? Can you quantify what is the value of investment on the books of Tata Steel? What will be the volume of, at Europe after the restructuring that you've talked about? I think the restructuring is what we talked about downstream, but these are some of the questions. I actually answered that question a little while back, when I mentioned that the impairment is part of the annual exercise as per the accounting standards to look at investments. This is being done effectively in a manner where the future cash flows and the value in use is tested against the carrying value. Depending on how the business performs, there will be triggers for looking at this potentially every quarter, if not every six months. Thank you. The next question is, how much coking coal do you expect to import for Indian operations in FY 2024, and how much of that will be through quarterly contracts? Overall we buy 15 million tons of coking coal, both for Europe and India. I would assume India, if I were to look at, you know, must be about 10-12 million tons. No, sorry. Eight to eight million tons or something like that. Yeah. How much would be quarterly contracts? Samita, you can check with Piyush and- Yeah. It's largely, quarterly, but we can come back- Mix based. Yeah. We can come back to you with the exact number. There is a question around funding of U.K., and I'll just club some of the questions together. Given the impairment, how much funding do you expect to provide TS U.K. in FY 2024? How much will your debt increase on funding to U.K. and the INR 16,000 CapEx spend? As I mentioned earlier that, first of all, the impairment doesn't trigger any funding. Impairment is a non-cash charge of your investment. There is no cash impact on that. We are also, as I guided in the beginning, that we are looking at starting the deleveraging process or rather restarting the process in FY 2024. It will be done more on the H2. We do have target about $1 billion to do that, which has been our long-term target. We will look forward to take as much as cash flows that we can towards deleveraging after we meet our cash flow requirements on CapEx, et cetera. The INR 16,000 crore CapEx is largely borne out of internal generation. Thank you. Next question is, if we decide to close the U.K. business, what would be the one-time closure cost, including the pension cost? The pension's not going to be a cost at all, because that's been taken care of. The closure cost, or the restructuring cost, I would say, because we would certainly look at the downstream business. The upstream, we will have to assess that and that some assessment is being done as we speak. It all depends on how the conversations with the government and stakeholders happen, because that's a decision which will happen after consultation with all stakeholders. Thank you. The next question is on Kalinganagar. Could you share the total CapEx spent so far and the remaining CapEx? I think you answered this, but, maybe the remaining. Yeah. I think we said INR 17,000 has been spent. This year we will be spending about INR 6,500-7,000 crores. Thereafter the numbers will be much smaller, it may be about another INR 3,000-4,000 crores. Thank you. The next question is on NINL expansion. Could you share the timeline on the finalization of the 5 million ton NINL expansion after completion of DFR, I'm not sure what DFR is, and getting board approval? Feasibility report. Feasibility report. Oh, feasibility report. Yeah. Basically our focus just now is on ramping it up. Now that we've ramped up, hopefully in the second half of the year, we're already doing the work on what should be the configuration, what are the assets. During this financial year, we'll go back to the Tata Steel board with a proposal for the next expansion so that we can get started on that soonest. Okay, thank you. The next question is on the working capital and the debt reduction. It says inventory is still high. Given that coking coal prices have cooled off, how much working capital unlocking is possible in H1? Does the $1 billion debt reduction guidance assume this working capital release? Yeah, of course. I think the INR 1 billion debt reduction takes all sources of capital, which is working capital release, earnings, and running the business across all geographies more tightly. I think the it is a confirmation that the working capital release will contribute to the debt reduction. Thank you. The next question is on the interest cost. What has helped Tata Steel maintain interest cost in a reasonable range despite the sharp increase in benchmark rates and despite an increase in your gross debt? One of the things that we have done is using the long-term, short-term arbitrage through the year, which ensured that in spite of the increase in the benchmark rates, we have been able to hold on to it. In the previous years, the significant deleveraging has been one of the key aspects of ensuring that our interest rates are within control. Now with further deleveraging targeted during this year, and for the years ahead, I think we will ensure that we control our interest coverage is at a healthy 5.2 times. Thank you. The next question is on the green hydrogen project. It says the economics of the pilot injection, which you've done in India, what is the timeline, what are the economics and what is the timeline for hydrogen-based DRI at TSN? By when do you expect to do this? As far as the India experiment is concerned, obviously, it's still early stages, smaller blast furnace, some injection. We'll study it, keep scaling it up. There's a limit to how much hydrogen you can put into a blast furnace. I think, whoever's working on it is trying to see how much of the PCI that we inject can be substituted with, hydrogen. We see that when you inject, hydrogen, there is obviously a net benefit. You can bring down the coke rates by about 10-15%. Obviously the cost of that hydrogen. The hydrogen that we injected, for instance, in the blast furnace, today in Jamshedpur has cost us over $12 a kilo. If you bring it to maybe around even $4 or $5, you will have significant advantage. Of course, if you're looking at using hydrogen and scale as a reductant to reduce DRI, then you're looking at hydrogen to be made available at around $2 a kilo or less. Obviously all this has to be green hydrogen if it has to make sense. In Netherlands, there's a plan which has been submitted to the government. We are in conversation with the government, you know, our plan as proposed to the government was to shut down one of the blast furnaces over the next few year, convert it into gas-based DRI, so that by 2030 you have one blast furnace down and a gas-based or hydrogen-based DRI line. By 2035, you have the other blast furnace down so that you become a completely gas or hydrogen-based DRI production unit. That's the timeline, but once our conversation with the government moves to the next level, we'll be able to give more definite timelines. Thank you. There's another question on hydrogen, so I'll just take it right now. It says, with regards to the trial of the hydrogen injection at Jamshedpur plant, by when does it look feasible to use hydrogen more widely for Indian operations? Has there been any government support to procure hydrogen at a cheaper cost? The answer for the second question is no. Yes, I think this was a big step. Like we said, nobody else has injected so much hydrogen into a blast furnace. We did it over four, five days. That itself is first in the world kind of thing. Some others have done it by mixing it with coke oven gas and injecting it, whereas the injected hydrogen itself into the blast furnace. This is giving us more data. Typically, in process industry, when you try out something new, you take it up step by step because you want to see the implications of any change that you make in the process, particularly in terms of the energy balance and the constituents of what goes inside a blast furnace. We'll do it, gradually, but I think it's a big development and, let's see how fast we can accelerate it. Thank you. There's a question on the merger of the subsidiaries. When do we expect the merger of Tata Steel Long Products to be completed, and can we expect any tax benefits from the merger? The merger process is underway with the NCLT hearings on the first motions started. It will happen progressively for each of the companies. The purpose of the merger is to drive synergies on all fronts. We'll see what other things that we can draw. Certainly, there are multiple synergies in the business case, which is why we are proceeding in the merger. Thank you. There's a question on NINL, on the iron ore mines. What is the status? Are these mines running? Yes, the mines are running and are feeding the Neelachal plant. I think we are running the mines at a annualized rate of 1.5 million tons. It's again, as per as the rest of the plant as it has gone as per plan. Thank you. One more question on India. If INR 17,000, and this is on the CapEx spend and the seeded CWIP on the balance sheet. It says if INR 17,500 has been spent on KPO2 to- date, the CWIP is about INR 30,000. What accounts for the balance at INR 12,500 crore of CWIP as on March 31, 2023? There are several other projects including for KPO. There are projects relating to the iron ore mines, the infrastructure around it, the augmentation of various capacities. It is a large part of those CWIPs are there. Plus, there are a significant amount of sustenance CapEx, which is an ongoing scheme over five years in each of the facilities now, be it Jamshedpur or in Kalinganagar or Meramandali and so on. The CWIP IP is in a steel plant, if you do a tracking, which has been growing, there are multiple projects that continue to grow, both from a sustenance improvement perspective as well as from a capacity growth perspective. Thank you. There are questions around steel demand, internationally, especially, given what is happening in China. I'll just club a couple of questions. Are we seeing any production cuts in China as their demand has not picked up as expected? What is your view on international steel markets this year? Do you see steel prices and demand subdued this year because of slowing economic growth and higher interest rates across the globe? I think on the first one, what I read was that CISA did a call actually in early May or end April to ask these producers to tone down because they were also concerned that if steel prices drop and everyone goes back into zero margin, then the business is not sustainable. I think there's already pressure on the Chinese steel producers to cut production to more reflect domestic demand. I think, while exports did go to eight million, if they continue to export at that level, I'm sure there'll be trade actions which will also follow. I think that is the comment on the Chinese steel side. In terms of globally, yes, on the demand side, a lot depends on what happens in China. India continues to be strong growth and demand. Europe, we expect things to slowly get better as energy cost goes up and helps the user industry. We also expect that the transition to other energy sources beyond Russia or transitioning to greener sources also will spur some investments. In the U.S., because of IRA, there's a lot of investments happening. We do see that as a positive impact. Yes, rising interest rates typically are not good for steel demand, but I think, you know, some of the actions that I described suggest that we will have, you know. You know, when I say better year because last year itself we saw so much volatility, depends on which quarter you compare to. One data point I want to share is that steel trade as a percentage of total steel production has been dropping over the years, you know. That is also positive because that means it's likely to be less disruptive. I think it has come down from about 40% of steel production to about 30% of steel production now over the last 10 years. This is largely to do with Chinese exports being more moderated and a lot more of regionalization of supply chains and value chains. Thank you. Multiple questions on the steel market in India. Firstly, I think we've said there will be slightly lower volumes in Q1. Are there any shutdowns? How do you see demand shaping up in the domestic market? Specifically, which sectors are you seeing growth? And thirdly, is there an impact of pre-election spend expected on steel demand? Yes, Q1 every year normally has a lot of shutdowns. That's normally the time when we plan a lot of our shutdowns. We did have a lot of shutdowns of multiple sites. Nothing as big as the one we're having in Netherlands, but, you know, a few days here and there. That's why the volumes of Q1, as I said, is about, I think, 400,000 tons less than for Q4. That is one. In terms of demand, we still see autos quite strong. Commercial vehicles, passenger vehicles are strong. Motorbikes are not back to where it was in 2019, but improving quarter-on-quarter. Export markets have been a little bit more subdued for two-wheelers, et cetera. Tractors have been strong. If I look at construction, industrial construction is strong. The pre-engineered building customers have four, five months, ssix months order books. Infrastructure is strong, of course, you know. That's an area where I expect some acceleration before the election so that the government can complete both at the central and state level many of the projects, which will have a positive impact on the public. If I look at residential, it's a bit of a mixed bag. If I look at commercial, I think it was strong, but of course one needs to see the impact of tech on the overall commercial space. Generally the sense we get is all shopping malls and those kind of commercial spaces are quite strong. Overall, Indian demand is quite strong. I think the only part of Indian demand which is a bit fragile is, Indian customers who are Indian customers or Indian producers who are dependent on export markets. I'm talking of Indian customers of steel who may be exporting their products to the global markets. That's the only area where the slowdown across the world may have a larger impact. I think I've covered it. Yeah. Yeah, the third question was if there's any pre-election impact on steel demand. Yeah. For that I said I believe in the infrastructure side, yes. There's more and more acceleration. There's more and more push to complete projects. That will certainly happen. You know, that's why if you talk to some of our bigger customers, they're full up with orders construction companies. Thank you. Some questions again on Europe. Koushik, maybe you could sort of talk about it a little more. Again, in terms of the impairment, what is the expectation for the future? How much more do we expect? Are there any triggers? Also a question in terms of what is the gross debt, PPE for Tata Steel Europe as of FY 2023? A lot of questions around, you know, around the impact likely, and the Europe exposure. I think I would only kind of try to articulate, you know, it's like looking into the future, but I would try to articulate that if and when a decision, after consultation with all stakeholders and going through the due process, we do come to a conclusion on the assets. At that point of time, it will certainly trigger a full review of the value and use of the business because only the downstream will remain, whereas the upstream will not be there. Therefore, the cash generating unit will certainly have an impact of how much will be the impairment. It is likely to be more in the stand-alone because that's the investment carrying value. As I mentioned a little while back that the consolidated impairment has been taken some years back on the PPE as well as through the losses that have been over the years. The stand-alone impact on a relative basis will be lower. The consolidated impact will be lower. The stand-alone impact will be higher. That's when the investment review will reflect on the numbers. These numbers are very hard to kind of predict and talk about because of the fact that at the time when the impairment actually happens, that's the time when you do the full assessment of the numbers. As I said that we carry the overseas holding in the books of Tata Steel as a, as in the investment numbers, and that largely reflects IJmuiden and U.K.. In about large part of it is IJmuiden or Netherlands, and some part of in the U.K., maybe, taking a guess it would be in the region of 65-35 kind of ratio. The other thing which I would like to say is any impairment whenever triggered is a non-cash charge, and therefore it will not have any cash impact other than any cost that is taken or undertaken for closure. That's when Pinaki answered whether this is in hundreds of millions or is in many billions. I said it is in millions. I think you should take comfort from that. If that were to happen, then the residual business, the target will certainly be ensuring that that works on a cash free basis. Okay. Thank you. I think we have time for maybe one audio question, which we will take it before we end the call. Over to you, Kinshuk. Thank you, ma'am. The next question is from Ashish Jain of Macquarie. Ashish, please go ahead. Hello. Hi. Yeah. Hi. Koushik, I just have two quick questions. Firstly, you know, you made a point that in the second half, U.K. had a loss of GBP 100 million-GBP 115 million cash loss. What is, how are you funding that, those losses today? We, it was not a cash loss, it was a cash. It was not a loss by itself, but it is. You know, if I have a cash loss, I don't have cash flows to fund my CapEx and so on. Just now it is being funded through the working capital route mostly because there are more securitization and more working capital arrangements which provides the cash flow. It's like a revolving credit, et cetera, which is what funds them, and we stand behind them. Right. you know, if I can just, you know, delve into this, stand behind them thing a bit more. Means if in worst case, this will devolve on Tata Steel India, is that the way to think about it? Worst cases it will devolve on India. It will. Okay. Got it. Got it. Secondly, on Kalinganagar, you know, I think Narendran spoke about it. One point I just want to mention. There is nothing called European balance sheet, Netherlands balance sheet. Right I ndia balance sheet, Tinplate balance sheet. There's only one balance sheet, which is Tata Steel balance sheet. So whatever is reflected in the consolidated debt of Tata Steel is for Tata Steel to service. It depends on wherever it is in the world. So I think that one, this must be clear. You know, it is not, t hat's why I was answering that letter of comfort, et cetera. Right. It is a conscious decision to carry on till we have an orderly decision to one way or the other. Similarly, when we are, the amount that is in the Netherlands balance sheet of EUR 600 million is reflected in the total cash. You know, it is one balance sheet and one cash flow that drives Tata Steel. You know, we don't run the business as, parts of, individual parts. We run it as one balance sheet, and if there are any parts which are challenging, we deal with it. If it is something strategic to be taken, we deal with it. Our investment to be done, we deal with it. I think we need to be very clear that it is one balance sheet, and anything that is reflected in that balance sheet, Tata Steel is responsible for it. Right. Right. You know, just one clarification on Kalinganagar. Did we say we are expecting, you know, a production sometime in April 2024? We said the new blast furnace. Yeah, yeah. I mean, there are different facilities coming up. The blast furnace- Right Is expected to come in, in the next 12 months. Okay. Got it. Got it. That's just the clarification I wanted. Thanks so much. Thank you. Thank you very much. That was the last question for today. I would now like to hand the conference back to Ms. Samita Shah for closing comments. Over to you, ma'am. Thanks, Kinshuk. Thanks everyone for dialing in. I hope, you got the answers you were looking for on the call. Look forward to connecting with you again, at the next call. Thank you, and good day. Thank you. Thank you. Thank you.