Is Tata Steel’s Netherlands Probe a Real Risk? Here’s What HSBC Says 

Synopsis: Tata Steel remained in focus after HSBC reaffirmed its ‘Buy’ rating, saying the Netherlands criminal proceedings involve limited historical incidents and are unlikely to materially affect the company’s fundamentals or growth outlook.

The shares of this leading steel producer were in focus after HSBC reaffirmed its ‘Buy’ rating, stating that the Netherlands criminal proceedings relate to limited historical incidents and are unlikely to materially impact the company’s fundamentals or growth prospects.

With a market capitalisation of Rs. 2,35,687 cr, the shares of Tata Steel Ltd were trading at Rs. 188.80 per share, up from its previous close of Rs. 187.15 per share. The stock has delivered an 18% return over the past year, gained 4% year-to-date, remained flat over the last six months, and declined 4% in the past month.

What’s the News

The Dutch Public Prosecution Office (PPO) has summoned Tata Steel IJmuiden B.V. (TSIJ), a material wholly owned subsidiary of Tata Steel Ltd in the Netherlands, over alleged pollution-related offences at its Coke and Gas Plants (CGP 1 and 2). The proceedings relate to allegations of allowing “undercooked coke” to occur and failing to report such incidents in a timely manner. 

TSIJ stated that undercooked coke can occasionally occur in large-scale industrial operations, leading to short-term peak emissions. The company noted that it produces around 135,000 coke batches annually and has significantly reduced such incidents through technical improvements implemented since 2020. According to the company, the occurrence of undercooked coke has declined by 98%, averaging less than 0.011% between January 2020 and May 2026, below the industry average. There was only one such incident in 2023 and none in 2024 or 2025.

The company believes the allegations are unjustified, arguing that the issues relate to a limited number of historical incidents that have already been addressed through operational improvements. It also highlighted that both Coke and Gas Plants will be permanently shut down in the coming years as part of the Green Steel Project, which aims to transition to a more sustainable steelmaking process.

TSIJ added that it is reviewing the allegations and will present a detailed defence during the court proceedings. The company reiterated its commitment to being a responsible neighbour, reducing its environmental footprint, and continuously improving its operations. It also highlighted that Tata Steel Nederland’s CO2 intensity of around 1.66 tonnes per tonne of crude steel places it among the world’s most carbon-efficient integrated steel producers.

HSBC Commentary 

HSBC has maintained its ‘Buy’ rating on Tata Steel with a target price of Rs. 260, which is 36% upside from current levels. The brokerage believes concerns surrounding the criminal proceedings in the Netherlands are limited in scope and do not materially alter its positive investment outlook on the company.

According to Tata Steel’s exchange filing, the criminal proceedings involving Tata Steel IJmuiden (TSIJ) relate to a limited number of historical incidents. HSBC highlighted that, out of approximately 135,000 operational pushes, there was only one reported incident in 2023, while no such incidents were recorded in 2024 or 2025, indicating a significant improvement in operational performance.

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