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.

Earlier on 15th of July this year, Tata Steel had said that it would require Rs 65.02 crore for implementation of the offer. Before that, Tata Steel had announced that it had no plans to merge Tata Sponge Iron, which has manufacturing facility at Bilaipada in Odisha, with itself.

Tata Sponge Iron was originally established as a joint venture between Tata Steel and the Industrial Promotion & Investment Corp. of Orissa Ltd. However in 1991, Tata Steel purchased out the Industrial Promotion & Investment Corp.’s stake in Tata Sponge Iron and made it an associate company.

Before the start of the offer, total public shareholding in Tata Sponge Iron was at 56.76 per cent. But, now it stands at 45.50 per cent.

Tata Sponge Iron has a total production capacity of 3.9 lakh tonnes per annum. It also has a 26 MW power generation plant of its own, which is sufficient to meet its energy needs.

Shares in Tata Sponge Iron slipped 1.66 per cent to close at Rs 299.85 a share in the yesterday’s trading.