Shares of Tata Steel surged nearly 7 per cent today after the company said it has put its entire UK business on the block amid a deepening crisis in the country's once-storied sector.
The stock advanced by 6.75 per cent to settle at Rs 324.40 on BSE. Intra-day, it soared 7.22 per cent to Rs 325.85.
The stock was the star performer among the 30 Sensex components.
At NSE, shares of the company climbed 6.73 per cent to close at Rs 324.30.
Led by the uptick in the stock, the company's market valuation rose by Rs 1,991.23 crore to Rs 31,506.23 crore.
On the volume front, 16.79 lakh shares of the company changed hands at BSE and over one crore shares were traded at NSE during the day.
Tata Steel has put its entire UK business on the block, putting thousands of jobs at risk amid a deepening crisis in the country's once-storied sector that the Indian conglomerate had entered nearly a decade ago with a USD 14-billion takeover with much fanfare.
Tata Steel, one of the flagships of the over USD 100-billion Indian conglomerate Tata Group, said it has decided to "explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts" amid a "deteriorating financial performance of the UK subsidiary in the last 12 months".
Tatas had entered the British steel sector, which once dominated the British economy, in early 2007 with acquisition of Anglo-Dutch steelmaker Corus after a fiercely fought takeover battle -- which till date remains the biggest ever overseas acquisition by an Indian group.
Tatas have struggled hard to turn around Corus, which it renamed as Tata Steel Europe in 2010 and analysts feel it could be really difficult to find a buyer. They attributed the decision for sale of the business to the huge loans taken for Corus acquisition, as also to the tough environment being faced by steel firms in Europe, particularly in the UK.
Rating agencies including Standard and Poor's said the decision to sell the UK business could be credit positive.
S&P Ratings Services said that Tata Steel's plan to restructure its UK operations, which could include potential divestment, will be positive for the credit profile of the company.
