Tata Steel gains as UK arm's deficit in pension scheme falls

MUMBAI: Shares of Tata Steel ended nearly 2 per cent higher today after its UK arm concluded the actuarial valuation of British Steel Pension Scheme (BSPS) and the deficit in the scheme has come down to 90 million pound (around USD 138 million) as on March 31, 2014.

The stock gained 1.56 per cent to settle at Rs 240.50 on BSE. During the day, it went up 2.36 per cent to Rs 242.40.

On NSE, shares of the company rose 1.68 per cent to settle at Rs 240.80.

The company's market valuation went up Rs 359.73 crore to Rs 23,357.73 crore.

On the volume front, 17.86 lakh shares of the company changed hands on BSE and over 89 lakh on NSE during the day.

The residual deficit of Tata Steel UK Ltd (TSUK), an indirect subsidiary of Tata Steel, stood at around 550 million pound (over USD 842 million) for the period ended March 31, 2011.

Trustee of BSPS and TSUK have wrapped up the triennial actuarial valuation of the scheme as on March 31, 2014, the company had said in a regulatory filing yesterday.

"As a result of measures agreed between the Trustee and TSUK and benefit changes implemented following consultations between TSUK, its employees and their representatives, the on-going residual deficit has been reduced from around 550 million pound as on March 31, 2011 to 90 million pound as on March 31, 2014," it added.

BSPS is the largest defined benefit scheme within Tata Steel Europe's portfolio. On account of low interest rates in the UK, the valuation on the scheme's liabilities increased significantly since the last actuarial valuation in 2011, leading to a much higher funding deficit.