The holding company of the mammoth Tata group, Tata Sons has increased its stake in group’s steel business, Tata Steel after they converted 1.2 crore warrants into equal number of shares for Rs 712.8 crore.

Tata Steel said in a filing with the Bombay Stock Exchange (BSE) that, "Tata Sons vide their letter dated January 20, 2012 has exercised the option to convert 1.2 crore warrants into ordinary shares of the company at a price of Rs 594 per share."

The holding company’s stake in Tata Steel was 28.8 per cent at the end of December. The increasing of stake in aimed at sending positive signal to the investors who have been unhappy over the fall in most steel stocks.

Tata Steel announced that its Committee of Directors have given its approval to the allotment of 1.2 crore shares of Rs 10 each to Tata Sons at a premium of Rs 584 per share.

The shares of Tata Steel were trading at Rs 432.25, up 0.68 per cent on the BSE this afternoon at the time of reporting. Tata Steel did not specify by how much the stake of Tata Sons will increase in the company.