Tata Steel net falls 14%

Shares in Tata Steel, valued at $7 billion, extended losses to more than 11 per cent to close at Rs 544 on the result in a weak Mumbai market, where the benchmark Bombay Stock Exchange index plunged more than 7 per cent. Incidentally, shares in Tata Steel gained 41 per cent between January and March, beating a 20 per cent rise in the main Bombay Stock Exchange index.

Tata Steel, which is planning to raise output seven-fold in the next 10-15 years to 35 million tonnes, has set target to produce 5 million tonnes of steel in the year to March 2007. It plans to raise up to $1 billion from overseas markets to fund its growth plans, the firm said.

The company produced 1.12 million tonnes of steel in the March quarter, up 10 per cent from a year ago as it commissioned an expanded smelter early last year.

Indian steel makers led by state-run Steel Authority of India Ltd and Tata Steel have raised prices by nearly 20 per cent since the start of March. Analysts expect more increases in the coming months on reduced stocks and demand that is rising ahead of the robust economy’s 8 per cent annual growth rate.

Easy availability of raw materials such as iron ore and coal and a burgeoning domestic market have drawn global majors such as Mittal Steel and South Korea’s Posco to India.

India is forecast to raise its steel production capacity to 110 million tonnes by 2020 from nearly 43 million now, according to the ministry of steel.