Ispat Industries ends 15% down on acquisiton by JSW Steel

KOLKATA: Shares of Ispat Industries ended 15.03% down at Rs 21.20 on the Bombay Stock Exchange today after the announcement that JSW Steel would acquire a majority stake in the company through the purchase of shares worth Rs 2,157 crore, allotted on a preferential basis.

The collaboration will enable the two steel companies to cut costs and share raw material linkages, Ispat Industries Executive Director Anil Surekha, who was here for the company's AGM, told reporters.

Following the transaction, the company will be renamed JSW Ispat Steel Ltd, he said.

Surekha, however, did not clarify what JSW Steel's stake would be in the company after the transaction.

In a filing to the Bombay Stock Exchange, JSW Steel said: "The company will subscribe to 108.66 crore equity shares of Ispat by way of preferential allotment at a price of Rs 19.85 per piece."

Nervous investors abandoned the counter following the announcement and the scrip plunged 17.42 per cent to touch an early low of Rs 20.65 on the BSE.

In contrast, JSW Steel closed 2.23 per cent up at Rs 1211.95.