Tatas to hike Tata Steel stake to ward off takeover threat
The Tata Group will increase its stake in Tata Steel by about 7% through a preferential issue of shares to ward off possible hostile takeover threats, chairman Rata Tata said on Wednesday.
By TNN |
MUMBAI: The Tata Group will increase its stake in Tata Steel by about 7% through a preferential issue of shares to ward off possible hostile takeover threats, chairman Rata Tata said on Wednesday.
“The steel industry is highly fragmented and considerably vulnerable. The only safeguard is to increase the founding family’s stake over time,” Mr Tata told the shareholders of Tata Steel.
The Tata Group’s holding in Tata Steel, now at about 27.48% will rise to about 33.6% by the end of the current financial year, said Mr Tata. “Given the right price, investors have a right and privilege to sell their stakes in the company. The increase in stake is to ensure that management control remains with the promoters,” Mr Tata said.
Mr Tata’s statement comes just days after global giant Mittal Steel clinched a deal to acquire Arcelor, ending a bitter six-month long battle. Mittal Steel has always expressed its desire to acquire companies in China and India.
India, Asia’s third largest economy, is seen as a major steel producing hub. Adequate raw materials and growing consumption — demand climbing 7% every year — make it one of the most attractive steel producing nations in the world.
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Lakshmi Mittal has already announced his plan to build a 12m tonne steel plant in Jharkhand and compete with Tata Steel in the domestic market.Start a SIP with as low as ₹500 with ET Money App!
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