BackVisa Steel stock soars as much as 20% on JV firm’s merger plan
The Visa Steel Ltd stock zoomed 20% to `16.38its highest trading permissible limitfor the day on BSE
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Mumbai: Shares of Visa Steel Ltd (VSL) on Friday surged as much as 20% after the company said it will seek shareholders’ approval for the merger of its JV firm Visa Bao Ltd (VBL) in an attempt to optimise costs and secure availability of resources for its ferrochrome business.
The stock zoomed as much as 20% to ₹ 16.38 - its highest trading permissible limit - for the day on BSE. On NSE, it soared as much as 19.71% to touch the upper circuit limit of ₹ 16.40.
VBL is a joint venture between VSL and Baosteel of China, with VSL holding 65% stake. The firm will hold a postal ballot soon to seek shareholders’ approval for the proposal and the results are expected next month. In order to have sustainable growth, it is necessary for any ferrochrome producer to have captive chrome ore mine or a captive power plant, if not both, VSL had said in a regulatory filing on Thursday.
“Hence, with a view to achieving competitive advantage to ensure availability of chrome ore and concentrates and optimise the utilisation of the power plant capacity, it is intended to consolidate the ferrochrome business of VSL and VBL by amalgamating VBL with VSL," it added.
Explaining the rationale behind the merger, the firm said at present, VSL has two submerged arc furnaces for production of 60,000 tonnes per annum (TPA) of ferrochrome and has a 75 MW captive power plant, with infrastructure to scale this up to 1.20 lakh TPA.
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