Tata Steel shares slipped nearly 2.3 per cent in early trade on Tuesday on account of the company's announcement that it was taking an impairment charge of $1.6 billion.
The steel giant announced on Monday that it was taking a $1.6 billion (nearly Rs 8,000 crore) hit on its profit for financial year 2013. The company is all set to announce results for the past financial year on 23rd of May.
Tata Steel blamed its beleaguered European operations for the huge impairment charge.
Indian steel major, Tata Steel has said that it expects the steel prices in the country to largely remain stable in the current financial year.
Managing director H M Nerurkar said that he expects the steel prices to remain stable and not fluctuate during the current financial year. He did not announce the reason for expecting the prices to remain stable this year even as he expects a 6-8 per cent growth in demand during the year. Currently, the average price of hot rolled coil is between Rs. 36,000 and Rs. 38,00 per tonne.
Steel prices will likely remain under pressure during the first three month of current financial year, unless prices of key raw material iron ore drops, Tata Steel Ltd MD Hemant Nerurkar said.
While slowdown in the economy brought demand for steel in automobile & construction sector, ban on extracting iron ore in Karnataka led to scarcity of the raw material, putting steel makers under intensified pricing pressure.
Tata Steel has confirmed that it has acquired a majority stake in Canada's Labrador Iron Mines Holdings' iron ore resources for C$30 million (nearly Rs 163cr).
As per terms of the strategic deal, Labrador Iron Mines Holdings will transfer 51 per cent stake in its Howse deposit to the Canadian minerals arm of Tata Steel, called Tata Steel Minerals Canada.
In turn, Tata Steel Minerals Canada will transfer its Timmins 4 deposit to Labrador for C$3 million, which will be recoverable from sales.
Tata Steel's 4.5 million euro investment in heat-retention boxes at its IJmuiden plant in the Netherlands is expected drag costs considerably down by save an estimated of 10 million cubic metres of gas per year. Ten million cubic metres of gas is sufficient to power as many as 5,500 homes.
The newly installed heat-retention boxes will slash the amount of heat that slabs lose between the casting stage and rolling stage of the process of production.
Indian Stock Market recovered towards the end of the trading session with support coming on heavy weight counters like ITC, TCS and HDFC. Indian markets were also helped by the positive trade in the European markets. BSE Sensex ended the day 51 points higher at 19742 and NSE Nifty managed a close above 6000.
Brokerage house Motilal Oswal has given sell calls for SAIL, JSW Steel and Tata Steel citing tough times for steel sector. Motilal Oswal has given sell rating for JSW Steel with a target price of Rs 478. JSW Steel closed a per cent lower at Rs 844 today.
Indian Stock Market followed global stock market trend and continued the upside movement. BSE Sensex was up by 50 points at 19763 and NSE Nifty was above 6000 with a gain of 15 points. US markets closed positive on January 2 with Dow Jones gaining 2.3%, Nasdaq up by 3% and S&P higher by 2.4 per cent.
Among major gainers in today's early trading session were Dr Reddys Labs, Cairn India, Ambuja Cements, BPCL, IDFC, Tata Steel, ACC and Bharti Airtel. Among major losers in today's session were Tata Power, Lupin, PNB and Maruti Suzuki.
Tata Steel authorities have hinted that vested interests among workers led to workers-security guards clash leaving nine persons injured, but also admitted that firing on workers was a wrong decision.
A verbal spar between Tata Steel contract workers and the company's security guards over taking bicycles inside company premises led to violent stone vs. bullet combat.
The metal sector has outperformed other indices in trade today due to renewed interest shown by the investors.
Among the major metal shares, Jindal Steel, JSW Steel, Tata Steel and SAIL increased between 2.27 per cent and 0.88 per cent during the day. The BSE Metal Index recorded a strong increase of 8.81 per cent during the previous week while the Sensex has gained 1.17 per cent during the same period.
Tata Steel Europe has announced its plans to close 12 facilities and axe 900 jobs across its UK operations, as part of its restructuring programme that aims to cut costs and enhance competitiveness.
The steel giant will cut a total of 580 jobs in South Wales, while Yorkshire, the West Midlands and Teesside will witness 155, 120 and 30 jobs being slashed respectively.
The company will also slash its Rotherham and Hartlepool operations due to the low demand for steel bars and pipes. Cross Keys and Tafarnaubach in South Wales are among the twelve sites that will be closed altogether.
Indian Stocks market closed lower on Thursday as majority of stocks lost ground due to weak investor sentiment. The concerns of US fiscal issues has caused fall of Asian and European markets.
BSE Sensex closed 148 points lower at 18471 after Diwali. NSE Nifty closed 36 points lower at 5631. Among major losers were heavyweight counters including Grasim, ITC and Tata Steel.
The combination of lower prices of steel, higher costs of raw material and poor demand made Tata Steel to report a consolidated loss of Rs 363.93 crore for the three months through September 30, against a net profit of Rs 212.43 crore in the corresponding period previous fiscal.
Consolidated net sales jumped from Rs 32,507 crore to Rs 33,867 crore year-on-year; while earnings before interest, tax, depreciation & amortization (EBITDA) slipped from Rs 3,021 to Rs 2,452 crore. EBITDA margins stood at 7.2 per cent.
Emerging reports suggest that the Odisha government has served notices to more than one hundred iron ore mining lease holders, asking them to pay Rs. 67,900 crore for their alleged involvement in illegal and excessive mining.
An official in the Odisha government's steel & mines ministry revealed that a total of 103 iron ore mining companies, including Tata Steel Ltd and Essel Mining & Industries Ltd, had been served notices for violating statutory clearances and mining excess ore.
Tata Steel has reportedly been slapped with a fine of around Rs 6,000 crore for its alleged involvement in illegal mining at its captive mines.
Citing unnamed sources, emerging reports state that Deputy Director of Mines (DDM) of Joda mining circle has fined Tata Steel and some other iron ore producers on charges of "illegal and excess mining."
But, the reported amount of fine imposed on the steel maker couldn't be verified so far.
Some of the issues that coal block allottees have pointed out before an Inter-Ministerial Group (IMG) are genuine and some are false, an IMG member present at the meeting said.
Coal block allottees were recently called by the IMG to explain the reason behind the long delays in development of coalmines as the union government is considering annulment of controversial coal blocks allotted to around 58 companies as these companies failed to start coal production in time.
Tata Steel has purchased 11.26 per cent stake or 17.34 lakh shares in its associate firm Tata Sponge Iron, raising its stake to 51 per cent.
Tata Steel purchased new shares through a voluntary open offer, which was launched on 27th of July at a price of Rs 375 a share. The voluntary offer closed on 9th of August.
Before the beginning of the offer, the steel maker had 39.74 per cent stake in the Tata Sponge Iron, the company revealed in its recent filing with the BSE.
Tata Steel Ltd. will need to raise funds for its Odisha project, Tata Steel Managing Director H M Nerurkar has confirmed.
Nerurkar said the company hadn't scaled down its modernization plans and to carry on those plans the company would obviously require funds.
Speaking to reporters on the sidelines of an award giving ceremony, Nerurkar said, "We will obviously need to raise money because of our ongoing expansions in Odisha, but we have not finalised our plans."
Tata Steel Ltd. has plans to raise nearly 260 billion rupees ($4.7bn) in loans from banks on an interest rate of around 11.25 per cent to fund its new mill, two people familiar with the situation revealed.
Speaking on the condition of anonymity, the people said that the syndicated project finance loan would most likely be for a period of more than eight years and would be disbursed in phases.
If the information is authentic, it shows that Tata Steel is trying to tap credit at home as debt crisis is still persistent in Europe.
Indian Stock market went higher on Friday with NSE Nifty closing at 5099.85, gaining 56.85 points while BSE Sensex gained 199 points.
Tata Steel gained 3.9 per cent to close the day at Rs 399. Tata Motors gained 3.78% to close at 212. Sterlite Ind and HDFC Bank were among major gainers.
Stocks touching 52-week high include Ambuja Cements, Deccan Cements, Divis Labs, Marico, UltraTech Cement and Wockhardt.
The shares of leading steel maker, Tata steel has fallen 2.42 per cent after the stocks we Ex- dividend on Monday.
The company said on Friday that crude steel production has increased 1.67 percent to 1.82 million tones compared to the same month in the previous year. However, it also said that the total sales remained the same at 1.59 million tonnes.