Tata Steel’s wholly-owned subsidiary, Neelachal Ispat Nigam Limited (NINL), received a Show Cause Notice demanding recovery of ₹587.86 crore. This demand relates to alleged shortfall in additional charges on Iron Ore dispatch between February 2022 and March 2025, calculated at 150% of royalty payable. NINL contests the claim, believing its mine does not fall under the relevant statutory section, and intends to pursue legal remedies if necessary.
Subsidiary Receives Significant Regulatory Demand
Tata Steel Limited has disclosed an important regulatory development concerning its wholly-owned subsidiary, Neelachal Ispat Nigam Limited (NINL). On February 25, 2026, NINL received a Show Cause Notice (SCN) from the Office of the Deputy Director of Mines, Government of Odisha.
The SCN seeks reasons why a substantial amount of ₹587,86,25,047/- should not be recovered from NINL. This alleged recovery stems from a claimed shortfall in additional charges levied on the dispatch of Iron Ore over the period spanning February 2022 and March 2025.
Basis of the Claim and Company Stance
The demanded amount has been calculated based on 150% of the royalty payable under Section 8A(8) of the Mines and Minerals (Development and Regulation) Amendment Act, 2021 (MMDR Act).
Crucially, NINL believes the SCN is erroneous. The company asserts that its Iron Ore Mine does not fall under the purview of Section 8A(8) of the MMDR Act as alleged. Consequently, NINL believes it may not be liable to pay the specified amount.
Next Steps and Impact Assessment
NINL confirmed its intention to respond suitably to the SCN and stated it will pursue necessary legal remedies before the appropriate court of law, if required.
The Management conducted a review of the potential impact of this SCN on both Tata Steel Limited and NINL. The announcement concludes that there is no impact on the financial, operational, or other activities of either the Company or NINL arising from the said SCN.
Background on NINL Ownership
The disclosure noted the history of ownership: In FY2023, Tata Steel acquired a controlling stake in NINL through its erstwhile subsidiary, Tata Steel Long Products Limited (TSLP). Following the amalgamation of TSLP into the Company in FY2024, NINL became an indirect subsidiary, and subsequently, in FY2026, it became a wholly owned subsidiary of Tata Steel Limited.
Source: BSE
