Amid weak stock markets, shares of Tata Steel today fell by over 4 per cent, wiping out about Rs 1,800 crore in investor wealth, after the company said it is in talks with Klesch Group to sell its long products business in Europe.
Tata Steel's stock fell by 3.57 per cent to settle at Rs 439.85 on the BSE. During the day, it lost 4.17 per cent to Rs 437.10. Its market capitalisation stood at Rs 42,719 crore today as against a level of Rs 44,499 crore on Tuesday.
At the NSE, the scrip was down 4.29 per cent to end at Rs 436.50.
In terms of volumes, 11.52 lakh shares of the company changed hands at the BSE, while over 82 lakh shares were traded at the NSE during the day.
Growing global growth worries spooked markets today with Sensex plunging 350 points to end below 26,000 mark after two months and Nifty slumping 116 points to sub 7,800 level on across-the-board selling in the last hour of trade.
Tata Steel yesterday said it is in talks with the Klesch Group to sell its long products business in Europe which employs about 6,500 people, including those at its distribution facilities.
"We believe a final sale irrespective of price will be positive for Tata Steel in long term. Tata Steel has not been able to make this asset upto mark despite investment and restructuring. Good seven and half years have passed after acquisition. We believe it is right decision to bite the bullet," according to Motilal Oswal Securities Ltd.
The MoU covers several UK-based assets including 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 other operations in France and Germany.
"About 6,500 people are employed at Long Products Europe and its distribution facilities. Tata Steel employs 30,500 people across Europe, including 17,500 in the UK," Tata Steel had said.
The Klesch Group, headquartered in Geneva is a global industrial commodities business, with three divisions specialising in the production and trading of chemicals, metals and oil.
