Tata Steel plans to acquire mining assets

Tata Steel rose 3.02% to Rs 801.15 at 11:21 IST on BSE on reports the firm has teamed up with state-run MMTC to acquire mining assets abroad.

The stock hit a high of Rs 808.50 and a low of Rs 775 so far during the day. The stock had a 52-week high of Rs 969.30 on 29 October 2007 and a 52-week low of Rs 469.66 on 30 April 2007.

World’s sixth largest steel maker has an equity capital of Rs 730.58 crore. Face value per share is Rs 10.

The current price of Rs 801.15 discounts its Q3 December 2007 annualised EPS of Rs 70.17, by a PE multiple of 11.41.

According to reports, Tata Steel and MMTC are setting up special purpose vehicle (SPV) where Tata Steel will hold 74% stake while the remaining will be held by the MMTC. The SPV will acquire mining assets abroad. The SPV will also undertake gold and diamond mining operations abroad. The boards of both the companies have already approved the proposed joint venture, the reports added.

Tata Steel’s net profit rose 0.5% to Rs 1068.58 crore on 11.3% growth in net sales to Rs 4973.92 crore in Q3 December 2007 over Q3 December 2006.

Tata Steel is engaged in manufacture and distribution of steel, welded steel tubes, cold rolled strips, bearings and other related products and services.