Tata Steel keen to buy Essar Steel

Tata Steel Ltd has expressed preliminary interest in buying out the debtridden Essar Steel Ltd and its assets, Cogensis said quoting reports. Reacting to the report, shares of Tata Steel tested 636.45 rupees, their highest level in the session, and closed up 2.4% at 634.60 rupees on the National Stock Exchange. The Tata group company is actively looking at inorganic expansion as part of its growth strategy, even as it is ramping up domestic capacity, Chairman N. Chandrasekaran had told shareholders at the company's annual general meeting earlier in the month.

He said that the company was "open" to acquiring Essar Steel, which is expected to give Tata Steel a strong foothold in western India. The race to buy Essar Steel, which has a net debt of 360 bln rupees, might also see POSCO expressing interest in the company, it said. Essar Steel has an annual capacity of 10 mln tn, with presence in India, West Asia and Africa. The company's healthy operating profit per tn and geographic presence are attracting multiple suitors, according to the report. Earlier this week, the Essar group had said that it was keen not to lose control of Essar Steel, which is currently undergoing insolvency proceedings at the National Company Law Tribunal.

The race to buy Essar Steel, which has a net debt of 360 bln rupees, might also see POSCO expressing interest in the company, the report said. Essar Steel has an annual capacity of 10 mln tn, with presence in India, West Asia and Africa.