Tata arm to buy 10% in Steel Strips for Rs 213 cr

Tata Steel's investment arm, Kalimati Investment Company, is to invest Rs 213 crore to buy 10 per cent stake in Steel Strips Wheels .

The Chandigarh-based automobile components company informed the Bombay Stock Exchange that its board has approved the issue of 1,255,856 shares of Rs 10 face value at Rs 170 a share on preferential basis to Kalimati Investment Company.

Tata group companies""Tata Steel and Tata Motors""and Steel Strips Wheels have an ongoing relationship, an official associated with the transaction said.

Tata Steel is a supplier of raw material to Steel Strips Wheels and Tata Motors is a buyer of its products.

"The Tatas probably see this as a strategic investment in picking up stake in Steel Strips Wheels," the official said. Steel Strips Wheels supplies the entire requirement of wheels for Tata Motors' western region requirement, the official said.

It is the sole supplier of wheels to Hondo City, Chevrolet Spark, and Logan, and has 60 per cent share in Maruti's vehicle portfolio, the official said. The company also plans to make a preferential issue of 347,663 convertible warrants to promoter and Managing Director Dheeraj Garg.

The warrants can be converted to shares at a price of Rs 170 each share, the company said in a notice to the exchanges.