Tata Steel rose 0.18% to Rs 393.10 at 14:34 IST on BSE after the company said it executed definitive agreement to acquire 100% equity of Odisha-based Brahmani River Pellets.
The announcement was made during trading hours today, 23 December 2016.Meanwhile, the BSE Sensex was up 60.13 points, or 0.23%, to 26,039.73.
On the BSE, so far 4.24 lakh shares were traded in the counter, compared with average daily volumes of 7.82 lakh shares in the past one quarter. The stock had hit a high of Rs 395.60 and a low of Rs 387.05 so far during the day.
The stock hit a 52-week high of Rs 440.90 on 11 November 2016. The stock hit a 52-week low of Rs 211.30 on 12 February 2016. The stock had outperformed the market over the past 30 days till 22 December 2016, rising 0.01% compared with the 0.28% fall in the Sensex. The scrip had also outperformed the market in past one quarter, rising 5.51% as against Sensex's 9.38% decline.
The large-cap company has equity capital of Rs 971.22 crore. Face value per share is Rs 10.
Tata Steel announces that it has executed definitive agreements to acquire 100% equity shares of Brahmani River Pellets (BRPL) from Aryan Mining and Trading Corporation (AMTC) and other companies in the Moorgate Industries Group (MIG). The transaction is based on an enterprise value of BRPL of Rs 900 crore plus closing adjustments and is subject to completion of certain condition precedents including regulatory approvals. The funding for the acquisition will be done from internal cash flows of Tata Steel.
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BRPL was originally established by MIG (MIG was formed on demerger from Stemcor Group of companies as part of a UK court-approved restructuring in 2015), which continues to hold a significant stake in BRPL through its shareholding in AMTC. BRPL owns a 4 million tons per annum (MTPA) pellet plant in Jajpur, Odisha and 4.7 MTPA iron ore beneficiation plant in Barbu, Odisha connected through a 220 kilometre underground slurry pipeline.
Koushik Chatterjee, group executive director (finance & corporate) and member of the Tata Steel board, said that the location of the BRPL assets makes this very strategic to Tata Steel especially to its Kalinganagar operations and has significant operating synergies to make the Kalinganagar plant even more competitive for the future. The iron ore from the company's captive mine in the Joda and Khondbond region will get transferred in future through the slurry pipeline and reduce freight costs significantly apart from the 4 mtpa pellet plant and other infrastructure which will enhance the operating efficiency and reduce costs of blast furnace operations in Kalinganagar. To build a similar facility would have taken significant time and costs and therefore, this acquisition is very timely as the company is looking to ramp up the capacity of the Phase I at Kalinganagar. This is also a demonstration of the company's commitment to the state and people of Odisha.
On a consolidated basis, Tata Steel reported net loss of Rs 49.38 crore in Q2 September 2016, compared with net profit of Rs 5609.43 crore in Q2 September 2015. Net sales rose 0.1% to Rs 26291.86 crore in Q2 September 2016 over Q2 September 2015.
Tata Steel Group stands among the top global steel companies with an annual crude steel capacity of 28 million tonnes per annum (MnTPA) and a turnover of $17.69 billion in the year ended March 2016. It is the world's second-most geographically-diversified steel producer, with operations in 26 countries and commercial presence in over 50 countries.
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