Bhushan Steel auction: Fear of winner's curse pulls down Tata Steel shares

Shares of Tata Steel fell by 6 per cent at Rs 648 on Mondar — losing Rs 45 billion of market value — as investors are worried about the massive premium paid by the company for Bhushan Steel as compared to its rival JSW Steel. Its bid for Bhushan Steel is pegged at over Rs 400 billion, which includes Rs 352 billion of upfront payment to financial creditors and another Rs 12 billion to operational ones.

Tata Steel also sweetened the deal with 12.5 per cent equity of Bhushan Steel to the lenders. JSW offered only Rs 280 billion of payment