Steel Authority of India rose 0.45% to Rs 66.45 at 10:40 IST on BSE after the company signed a Memorandum of Understanding with ArcelorMittal to set up an automotive steel manufacturing facility under a Joint Venture arrangement in India.
The announcement was made after market hours on Friday, 22 May 2015.
Meanwhile, the S&P BSE Sensex was down 112.58 points or 0.4% at 27,844.92.
On BSE, so far 25,471 shares were traded in the counter, compared with an average volume of 3.65 lakh shares in the past one quarter.
The stock hit a high of Rs 66.80 and low of Rs 66.20 so far during the day. The stock had scaled a 52-week high of Rs 112.90 on 9 June 2014. The stock hit a 52-week low of Rs 65.50 on 11 March 2015.
The stock had underperformed the market over the past one month till 22 May 2015, falling 8.95% compared with Sensex's 0.24% rise. The scrip had also underperformed the market in past one quarter, dropping 11.09% as against Sensex's 4.36% fall.
The large-cap steel manufacturing company has an equity capital of Rs 4130.53 crore. Face value per share is Rs 10.
The Memorandum of Understanding (MoU) between ArcelorMittal, the world's leading steel and mining company, and the Steel Authority of India (Sail), is the first step of a process to establish a joint venture (JV) between the two companies. The proposed JV will construct a state-of-the-art cold rolling mill and other downstream finishing facilities in India that will offer technologically advanced steel products to India's rapidly growing automotive sector. The MoU was signed in London on Friday, 22 May 2015, by Mr. Lakshmi Mittal, Chairman and CEO of ArcelorMittal, and Mr. C.S. Verma, Chairman of Sail. Mr. Rakesh Singh, Secretary to the Government of India, Ministry of Steel and Mr. Aditya Mittal, ArcelorMittal CFO and CEO ArcelorMittal Europe, were also present.
The combination of significant demand growth and limitations in India's existing domestic automotive steel production capabilities provides a compelling opportunity for both ArcelorMittal and Sail. In the coming months, a working group with representatives from both companies will work on evaluating a structure for the proposed JV and carry out feasibility studies as part of a comprehensive due diligence process.
Sail's net profit rose 8.7% to Rs 579.09 crore on 1.8% decline in total income to Rs 11452.53 crore in Q3 December 2014 over Q3 December 2013.
The government of India held 75% stake in the firm as at 31 March 2015.
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