Mumbai: With a jump of over 50% in its share price over the past one year, public sector behemoth Steel Authority of India Ltd (SAIL) became the country’s first metal firm to cross the Rs50,000 crore-mark in market value on Wednesday.
Shares of SAIL, the country’s most valued metal firm, gained over 5% to touch a 52-week high of Rs124 before closing at Rs122.75 at the Bombay Stock Exchange, giving the company a market capitalization of Rs50,700.67 crore.
After briefly losing its top position in April-May last year, SAIL has taken a significant lead over its rivals in the metal sector market cap league— Tata Steel and Hindustan Zinc —with a consistent rise in its share price. The company’s share price stood at just Rs81 a year ago, giving it a market cap of about Rs32,000 crore.
In comparison, the shares of Hindustan Zinc, which had replaced SAIL as the most valued metal firm in the April-May period last year, have been under significant pressure due to volatile global commodity prices. Hindustan Zinc’s market cap, which had hit a high of over Rs45,000 crore in May last year, was quoted at Rs29,660 crore on Wednesday.
Shares of Tata Steel, the country’s second most valued metal firm, has also been under pressure due to concerns that its $12 billion (Rs5,16,000 crore) acquisition of Anglo-Dutch steel maker Corus would weigh down on its balance sheet in the short term.
Tata Steel’s market value has dropped to Rs29,731 crore from over Rs36,780 crore a year ago.
Shares of both SAIL and Tata Steel had witnessed a plunge of nearly 40% during the one-week period ended 18 May, 2006, amid a broad-based market meltdown, but regained most of the losses by the end of the month.
Recently, SAIL’s board gave in-principle approval to a proposal for modernization and capacity expansion of the Bhilai Steel Plant (BSP). The plan, implementation of which would cost an estimated Rs11,262 crore, would increase BSP’s capacity to seven million tonnes (mt) of steel per annum. At present, BSP can produce 3.93 mt.