Tata stake in Tisco goes above 26%

Tata stake in Tisco goes above 26%
ENS ECONOMIC BUREAU

Mumbai, Jan 4: With hostile takeovers becoming the order of the day, the Tata group companies have hiked their stake in Tata Steel to exceed the critical 26 per cent level. The increase in the group holdings has come in the process of the promoters' efforts to provide support to the stock price in a bearish market where old economy scrips have been badly battered.

Addressing a press conference on Wednesday, Tata Steel managing director JJ Irani said that the stock had been bought at a time when Tata Steel stock prices were ruling low. The Tata Steel stock had touched a low of Rs 93.60 in October last year, and began rising by November, when it touched Rs 97.50. The group holdings as on March 31, 2000 stood at 24 per cent.

Tata Steel chairman Ratan Tata, at the annual general meeting of the company, in June last year, had said that the group will increase its stake in Tata Steel by the creeping acquisition route in order to evade any takeover threat in addition to preserving shareholder value. In the present scenario, analysts said that there is little possibility of a hostile takeover.

However, the company is hiking its stake through creeping acquisitions in anticipation of future laws which might leave the company vulnerable to takeovers from multinationals.

Irani to retire in June: Tata Steel managing director Dr JJ Irani will call it a day in June this year. Irani, who will turn 65 this June, will step down from the post of managing director of India's oldest and most profitable steel company. Irani on Wednesday said at a press conference that his successor will be announced before he retires.

It has been learnt that the coveted post -- at the helm of Tata Steel -- will go to an insider. A senior Tata group official said that Irani himself is in favour of his successor being a "Tata Steel man" rather than an outsider.

Indica sales slow down
MUMBAI: After Maruti, it was the turn of Telco to announce a slowdown in its car sales. Sales of Tata's Indica continued to fall with its sales for December 2000 falling to 2243 units from 2424 units sold in November last year. In the first nine months of the current fiscal, Telco went up negligibly to 31,958 passenger cars as compared to 31,834 units sold in the same period of last fiscal.

In a statement, Telco said that the car improved its market share in December 2000 to 16.3 per cent as against previous month and has ended the first nine-months of fiscal 2001 with a market share of 17 per cent in the small car segment and 8 per cent to the total passenger car market.

But, despite sagging fortunes, the Telco scrip moved up on the Bombay Stock Exchange on rumours that the company is hiving off its car project as a separate company. The Telco share price price has been a firm feature of the market over the last couple of trading sessions. After surging 8 per cent yesterday, the scrip gained another 2 per cent plus today to Rs 104.75 on a huge volume of 22 lakh shares in the first hour of trading on BSE.

While the Tata group shares have become favourites on the bourses these days, there are talks again that the Telco car project may be hived off or a joint venture will be entered into.

The sales tax rationalisation by the Maharashtra government has also hit its sales. In the first eight months Apr-Nov 2000, medium and heavy commercial vehicles (M&HCV) sales have declined by 25 per cent to 31,451 vehicles from 42,023 in the corresponding period of the previous year. While it is not doing well in its mainstay M&HCV business, the capitalisation of Indica small car project continues to bleed Telco's financials.