Shares of Ispat Industries closed sharply lower by over 15 per cent on the Bombay Stock Exchange after JSW Steel announced acquiring a controlling stake in the company for Rs 2,157 crore. Ispat tumbled 15.03 per cent to close at Rs 21.20 on BSE. During the day,the scrip had plunged 17.23 per cent to touch an intra-day low of Rs 20.65 a share. "Ispat will issue on a preferential basis,108.66 crore equity shares at a price of Rs 19.85 per piece for consideration of Rs 2,157 crore," JSW Steel said in a filing to BSE. Marketmen were divided in their views for the proposed acquisition. "The deal price of Rs 19.85 per share indicates that the JSW Steel has definitely acquired Ispat Industries shares at a significant discount," SMC Global Securities' Strategist and Head of Research Jagannadham Thunuguntla said. "We believe Ispat is heading for a steep fall below the open offer price in coming days as the price band may be out soon," CNI Research CMD Kishore P Ostwal said. In contrast,Edelweiss Capital said,"We believe the Ispat acquisition is operationally positive considering benefits of scale and the turnaround possible due to efficiency improvement,financial strength,and better management that JSW brings to the table." Profit booking was also seen at Ispat's counter on the National Stock Exchange,where the stock ended the session at Rs 21.30,down 14.80 per cent. The stock exchange filing also noted that JSW's holding will be at 41.29 per cent on completion of preferential allotment,with a scope to go up based on the outcome of the open offer,the existing promoters will hold 26 per cent on completion of transaction. Sajjan Jindal-led JSW Steel rose by 2.23 per cent to settle at Rs 1,211.95 on BSE. During the trade,it soared 4.59 per cent to an intra-day peak of Rs 1,240. Meanwhile,the BSE benchmark Sensex ended the day with a gain of 171.44 points at 20,060.32.
