In early trade, Steel Authority of India was trading nearly flat at Rs 133.10 after it signed up an memorandum of understanding (MoU) with Manganese Ore India to form a joint venture to manufacture ferro-manganese and silico-manganese.
During the day, the scrip touched a high of Rs 134 and a low of Rs 132.70. The scrip has had its 52-week high of Rs 149.95 on 28 May 2007 and a 52-week low of Rs 64.25 on 24 July 2006.
Nearly 41,252 shares were traded on the counter. During the last one quarter, the recorded average daily volume for the stock was two lakh shares. Its recent market price of Rs 133.10 brushes off its FY 2007 earning per share of Rs 15.20 by a PE multiple of 8.75.
On 26 June 2007, Sail annunciated the signing of a MoU with Manganese Ore India (MOIL) for making a joint venture company (JV) to create ferro-manganese and silico-manganese. The planned JVC will make ferro-alloys thru three furnaces to be established in or around Bhilai. The company will be integrated with a debt-equity ratio of 1:1 and 50:50 shareholding by Sail and MOIL
On the other hand, MOIL is a public sector company with large resources of manganese ore in India and is able to provide high value added inputs for this deal. Sail decided to enter a JV with MOIL to guarantee regular and quality supply of manganese ore at competitive cost.
The boards of both companies have already given in-principle endorsement to the suggestion for setting of the JV.
Sail's net income climbed 72.40% to Rs 1901.88 crore Q4 March 2007 versus Rs 1,103.20 crore in Q4March 2006. Sales were up 12.65% to Rs 10,385.08 crore in Q4 March 2007 as against Rs 9,218.97 crore in Q4 March 2006.
On 1 June 2007, the board of Sail had sanctioned the offer for establishing a steel plant in Chhattisgarh with an initial capacity of four million tonnes per annum in association with equity participation from the company, Rashtriya Ispat Nigam (RINL) and National Mineral Development Corporation (NMDC).