Tata Steel advanced 0.51% at Rs 677.90 at 10:40 IST on BSE after the company and thyssenkrupp AG signed a memorandum of understanding.
The announcement was made during market hours today, 20 September 2017.Meanwhile, the S&P BSE Sensex was up 0.69 points at 32,403.06.
On the BSE, 2.41 lakh shares were traded on the counter so far as against the average daily volumes of 5.06 lakh shares in the past one quarter. The stock had hit a high of Rs 689.75 and a low of Rs 674.30 so far during the day. The stock had hit a 52-week high of Rs 692 on 12 September 2017. The stock had hit a 52-week low of Rs 355.40 on 19 September 2016.
The stock had outperformed the market over the past one month till 19 September 2017, gaining 8.18% compared with 2.78% gains in the Sensex. The scrip had also outperformed the market in past one quarter, rising 30.28% as against Sensex's 3.48% rise. The scrip had also outperformed the market in past one year, gaining 87.12% as against Sensex's 13.16% rise.
The large-cap company has equity capital of Rs 971.22 crore. Face value per share is Rs 10.
Tata Steel and thyssenkrupp AG have signed a memorandum of understanding to create a leading European steel enterprise by combining the flat steel businesses of the two companies in Europe and the steel mill services of the thyssenkrupp group.
The proposed 50:50 joint venture - thyssenkrupp Tata Steel - would be focused on quality and technology leadership, and the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products.
The joint venture would have a pro forma turnover of about 15 billion per annum (Rs 115000 crore) and currently employs about 48,000 people spread across various locations. It would be headquartered in the Amsterdam region of the Netherlands. The proposed combination of businesses would be formed through a non-cash transaction framework, based on fair valuation where both shareholders would contribute debt and liabilities to achieve an equal shareholding in the venture.
thyssenkrupp Tata Steel would have a robust capital structure that is well matched by the underlying free cash flows of the company. It would benefit from the scale and distribution network capability of the combined assets to achieve quality, technology and cost leadership in the European steel industry. It is also the clear intent of both partners to remain as long term investors and continue the present network configuration of all the upstream hubs in the proposed joint venture company.
The process will move to the next phase in the transaction with due diligence and negotiations on the definitive detailed agreements. The combination is subject to executions of the final agreements and obtaining all corporate authorisations, including board and Tata Steel shareholder approvals. Completion would be conditional on certain closing conditions, including obtaining requisite competition approvals.
On a consolidated basis, Tata Steel reported net profit of Rs 921.09 crore in Q1 June 2017, compared with net loss of Rs 3183.07 crore in Q1 June 2016. Net sales rose 18.9% to Rs 29386.76 crore in Q1 June 2017 over Q1 June 2016.
Tata Steel is the world's second-most geographically-diversified steel producer, with operations in 26 countries and commercial presence in over 50 countries.
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