Tata Steel down 5%

Tata Steel went down 5% to Rs.654.55 today and continues to remain firmly in the red. On the other hand, Bhushan Steel is locked at the 20% UC at Rs.53.85.

As per various media reports, Tata Steel has now emerged as the top bidder for taking over Bhushan Steel. It has made bid at Rs.24,500 crore. This includes an upfront payment to lenders of Rs. 17,000 crore, a cash infusion in the company of Rs. 7000 crore to meet working capital requirements and a payout to operational creditors as well as employees. 

The acquisition of Bhushan Steel will help boost the domestic steel capacity of Tata Steel by a whopping 43% to 18.6 million tonnes per annum. But the market has today decided to book profit on the counter of Tata Steel, voicing concerns of increasing debt even as the company progresses with a Rs.12,800 crore rights issue to raise funds to reduce debt.