Shares of Tata Steel rose by over 3% in early trade on the bourses today after the company exited from Australian coal miner Riversdale by selling its entire 26.27% stake to Rio Tinto for AUD 1.06 billion ($1.11 billion).
The announcement was made after market hours yesterday.
Shares of the company jumped by 3.31% to touch an early high of Rs 571.50 on the BSE, while on the NSE, the stock gained 3.2% to hit an early peak of Rs 571.
On the volume front, over 22 lakh shares of the company changed hands on the bourses within the first few minutes of trade.
The sale consideration of approximately AUD 1,060 million (about Rs 5,074 crore) represents around 100% appreciation of the value at which Tata Steel first invested in the the company in less than four years.
Tata Steel said it did not want to hold on to its stake in the mining firm — which is proposed to be delisted from the Australian Stock Exchange — without any joint venture agreement with majority shareholder Rio Tinto.
Rio Tinto holds a 73.2% stake in Riversdale, which has around 13 billion tonnes of coal reserves in its two projects in Mozambique — Benga and Zambeze.
However, Tata Steel maintained that it would continue to hold a 35% stake in the joint venture, Benga Coal Project, with Riversdale Mining.
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