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Sesa Goa acquires Bellary Steel & Alloys
Sesa Goa announced the acquisition of assets of Bellary Steel & Alloys (BSAL) for a total
cash consideration of `220cr. BSAL is setting up a 0.5mn-tonne steel plant in Bellary and
holds nearly 700 acres of land. As per the company’s statement, the acquisition will allow
it to venture into steel making in Karnataka.
Sesa Goa is currently reviewing options for commissioning the plant at the earliest.
However, we await management’s verdict on the timeline, capex to be spent and
clearances and approvals for the project, among others. Over the past one month, the
stock has corrected by nearly 16.0% on account of imposition of 20% export duty on fines
and an increase in railway freights. Nevertheless, we believe the concerns over the volume
growth, rise in export duty and railway freight and ban on export of iron ore from
Karnataka mines have been discounted in the current stock price. Hence, we maintain
Accumulate with a target price of `298.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sesa Goa acquires Bellary Steel & Alloys
Sesa Goa announced the acquisition of assets of Bellary Steel & Alloys (BSAL) for a total
cash consideration of `220cr. BSAL is setting up a 0.5mn-tonne steel plant in Bellary and
holds nearly 700 acres of land. As per the company’s statement, the acquisition will allow
it to venture into steel making in Karnataka.
Sesa Goa is currently reviewing options for commissioning the plant at the earliest.
However, we await management’s verdict on the timeline, capex to be spent and
clearances and approvals for the project, among others. Over the past one month, the
stock has corrected by nearly 16.0% on account of imposition of 20% export duty on fines
and an increase in railway freights. Nevertheless, we believe the concerns over the volume
growth, rise in export duty and railway freight and ban on export of iron ore from
Karnataka mines have been discounted in the current stock price. Hence, we maintain
Accumulate with a target price of `298.
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