Tata Steel gains after getting Quebec govt's financial support for a project

Tata Steel rose 0.24% to Rs 368.55 at 10:00 IST on BSE after the company announced that Quebec supported the implementation of a Tata Steel Minerals Canada's investment project in Schefferville.

The announcement was made before market hours today, 27 July 2016.

Meanwhile, the S&P BSE Sensex was up 166.94 points or 0.6% at 28,143.46.

On BSE, so far 1.21 lakh shares were traded in the counter as against average daily volume of 9.13 lakh shares in the past one quarter. The stock hit a high of Rs 370.25 and a low of Rs 365.40 so far during the day. The stock had hit a 52-week high of Rs 379.25 on 18 July 2016. The stock had hit a 52-week low of Rs 200 on 29 September 2015. The stock had outperformed the market over the past one month till 26 July 2016, surging 17.65% compared with 5.98% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, advancing 2.58% as against Sensex's 7.57% rise.

The large-cap company has equity capital of Rs 971.22 crore. Face value per share is Rs 10.

Quebec government awarded financial contribution of C $175 million to Tata Steel Minerals Canada (TSMC) to support the achievement at Schefferville of a direct shipping iron ore project (DSO project) in which Tata Steel Group has invested an amount in excess of C $1 billion.

The financial contribution includes equity stake of $125 million through the Capital Mining Hydrocarbons Fund and a loan of $50 million from Investissement Quec, acting as an agent of the Government.

TSMC, founded in 2010, is an indirect subsidiary of Tata Steel, with equity participation from New Millennium Iron Corp. (NML), a TSX listed company headquartered in Montreal, to develop the DSO deposits located in Quebec and Newfoundland and Labrador. TSMC forecasts annual production of over 6 million tonnes of iron ore.

Separately, Tata Steel announced after market hours yesterday, 26 July 2016 that its hot metal production rose 16.5% to 3.01 million tonnes in Q1 June 2016 over Q1 June 2015. Crude steel production rose 7.6% to 2.52 million tonnes in Q1 June 2016 over Q1 June 2015. Saleable Steel production rose 4.8% to 2.34 million tonnes in Q1 June 2016 over Q1 June 2015 and sales rose 0.1% to 2.15 million tonnes in Q1 June 2016 over Q1 June 2015.

Tata Steel reported consolidated net loss of Rs 3213.76 crore in Q4 March 2016, compared with net loss of Rs 5674.29 crore in Q4 March 2015. Net sales fell 12.5% to Rs 29164.37 crore in Q4 March 2016 over Q4 March 2015.

Tata Steel is Europe's second largest steel producer, with steelmaking in the UK and Netherlands, and manufacturing plants across Europe. The combined Tata Steel group is one of the world's largest steel producers, with a steel capacity of more than 28 million tonnes and 80,000 employees across five continents.

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