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Shares of Tata Steel rose by over 3 per cent in the early trade on the bourses today after the company exited from Australian coal miner Riversdale by selling its entire 26.27 per cent stake to Rio Tinto for A$1.06 billion ($1.11 billion).
The announcement was made after the market hours yesterday.
The scrip jumped by 3.31 per cent to touch an early high of Rs 571.50 on the BSE, while on the NSE, it gained 3.2 per cent 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.
Later, during the pre-noon session, the scrip was trading up by 2.55 per cent at Rs 567.25 on the BSE and up by 2.46 per cent at Rs 566.85 on the NSE.
The sale consideration of about A$1,060 million (about Rs 5,074 crore) represents around 100 per cent appreciation of the value at which Tata Steel first invested in 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 per cent stake in Riversdale, which has around 13 billion tonnes of coal reserves at its two projects in Mozambique — Benga and Zambeze.
However, Tata Steel maintained that it would continue to hold a 35 per cent stake in the joint venture, Benga Coal Project, with Riversdale Mining.
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