Tata Steel pares early gains; stock down 1%

Stock had earlier gained 1.5% after the company signed a memorandum of understanding with the Klesch group for the potential sale of its long products business in Europe

Tata Steel has pared early gains and is down nearly 1%. Earlier, the stock had gained over 1.5% on the back of reports that the company signed a memorandum of understanding with the Geneva-based Klesch group for the potential sale of its long products business in Europe and associated distribution activities.  

Analysts said the division accounted for 25% of Tata Steel’s European operations. It produces about five million tonnes of long products like billets, wire rods and rails, and has 6,500 people on its rolls. The business could be valued around $1.3 billion, an analyst said.

The memorandum covers Tata Steel’s Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York, as well as operations in France and Germany, according to a statement by the company.

The stock opened at Rs 461 and quickly edged higher to Rs 468. Over 1,38,000 shares changed hands on teh BSE and NSE in the first fifteen minutes of trade.