Shah Alloys soars on possible tie-up with Posco

Shah Alloys hit upper circuit limit of 10% at Rs 42.15 at 11:41 IST on BSE on reports the company may tie up with the Indian unit of Korean steel maker, Posco.

Meanwhile, BSE Sensex was up 116.10 points or 0.73% to 16,039.82.

On BSE, 72,300 shares were traded in the counter. The scrip had an average daily volume of 33,205 shares in the past one quarter.

The stock hit a high of Rs 42.15 and a low of Rs 37 so far during the day. The stock had a 52-week high of Rs 104 on 12 April 2007 and a 52-week low of Rs 35.90 on 14 February 2008.

The company’s current equity is Rs 19.8 crore. Face value per share is Rs 10.

According to reports, Shah Alloys (SAL) has been holding talks with the South Korean steel major Posco since a few months to float a joint venture.

Shah Alloys has invited Posco India to start steel business in Gujarat, the reports added. The reports suggests the tie-up is expected to be a joint venture either to set up a greenfield steel manufacturing plant or to outsource steel manufacturing to SAL.

Shah Alloys reported a net loss of Rs 27.25 crore in Q3 December 2007 compared to a net profit of Rs 11.02 crore in Q3 December 2006. The company’s sales declined 39% to Rs 237.36 crore in Q3 December 2007 over Q3 December 2006.

Shah Alloys manufactures mild steel, stainless steel, C T D bars, S S flats and pattas, and cold-rolled sheets.