Tata Steel, the Tata group flagship, has shelved plans of selling its software division, said F A Vandrevala, deputy managing director (new and allied business).
"Software is a core resource for the company" he explained. He, however, did confirm that Tata Steel had been weighing the option of selling the division and group company Tata Consultancy Services (TCS) was in the fray for it.
Though both IBM and TCS had bid for the entire IT division, Tata Steel's inability to arrive at an appropriate valuation for the division led to the decision to split the hardware and software components.
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The company had entered into a long-term agreement with IBM last year for outsourcing hardware requirements. An internal valuation for the hardware division had put its worth at Rs 200 crore.
However, Vandrevala said that no valuation for the software division has been done, adding, "I am not aware of any valuation done for the software component of the division."
Tata Steel has investible funds of around Rs 1000 crore every year and plans to invest around Rs 300-400 crore in steel.
The balance maybe used for new business. Tata Steel has identified titanium, chrome and bearings as its new markets.
With regard to its foray into titanium, Tata Steel has made an application to the Tamil Nadu government for a survey licence but it is yet to receive approval from the government.
The company has also decided to set up a ferro chrome unit in Australia with an investment of around Rs 300 crore.
Tata Steel has been weighing the viability of investing in the telecom sector as an investor in group companies operating in that sector.
The company would make such investments only if returns in the sector are higher than steel, analysts attending a company briefing were told recently.
The company's net profit for 2000-01 grew by 30 per cent to Rs 553.44 crore. The stock market, however, is yet to be enthused by the company's results.
The Tata Steel scrip closed at Rs 140.7 on June 1, the day the company's annual results was announced and the scrip closed at Rs 135.90 on the Bombay Stock Exchange (BSE) and at Rs 137.65 on the National Stock Exchange (NSE) today.