Steel majors in expansion mode as mkts take toll

With the BSE Sensex having come down nearly 5% since the start of the year, stocks of steel majors SAIL and TISCO have lost their sheen on the bourses even as some steel companies are into expansion mode.

Stock prices of three out of five companies surveyed have taken a beating between 6% and 28% on the bourses with Sesa Goa being the biggest loser falling 27.93% from Rs.1,028.30 on January 03, 2005 to Rs. 741.10 on April 22, 2005.

Steel majors SAIL and TISCO have also lost value on the bourses since the start of the year. SAIL has come down a huge 10.42% from Rs. 62.85 to Rs. 56.30 during the period while TISCO has witnessed its stock plummet 6.62% from Rs. 387.25 to Rs. 361.60.

The drop in share prices comes even as some steel majors have announced significant expansion plans.

SAIL, the 11th largest producer of steel in the world has an ambitious expansion plan of Rs. 25,000 crore for expanding capacity of its existing 13 million tonnes of hot metal to 20 million tonnes by 2011-12 by expanding iron ore production from 20 million tonnes to 35 million tonnes.