India’s largest life insurer, Life Insurance Corporation(LIC) of India has increased its shareholding in Steel Authority of India Ltd India by 2.001 percent from 28,64,03,775 to 35,88,07,919 equity shares. With this, its stake in the paid-up share capital of the company has gone up from 6.93 percent to 8.68 percent. The shares were purchased in the open market at an average price of Rs 66.18 per share according to the BSE filing.
Steel Authority of India Ltd shares were trading at Rs 83.85 apiece, up 1.15 percent on Monday. At the same time, LIC’s shares were trading at Rs 597.40 apiece on the National Stock Exchange (NSE).
Steel Authority of India (SAIL) is India’s largest state-owned iron ore producer. The company is engaged in manufacturing a wide variety of steel products such as galvanized sheets, electrical sheets, railway products, plates, and many others.
LIC’s investment in SAIL at the end of the March 31, 2023 quarter was 28.64 crore equity shares. Thus, from April 1st to June 8th, LIC acquired additional 7.24 crore equity shares in SAIL.
Considering the current market price of the Steel Authority of India, LIC’s stake in the steelmaker is worth around Rs 3,010 crore.
Steel Authority of India is a mid-cap company with a market capitalization of Rs 34,675 crores, It has a low return on equity of 3.97 percent and the debt-to-equity ratio stands at 0.47.
As per consolidated financials, the Operating revenue of the company improved from Rs 25,042 crore in Q3 to Rs 29,130 crore in Q4. Similarly, net profit increased from Rs 429 crore to Rs 885 crore.
Axis Securities gave a ‘Buy’ tag to the company with a target price of Rs 93 indicating an upside of 11 percent as compared to the current price levels. The rationale behind giving such a recommendation is that analysts expect Sales volume to be 18.7MT by FY24 and the company has planned to add ~2.5-3MT of additional capacity for debottlenecking in the next 3-4 years.
Written by Omkar C
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