Mumbai: Tata Steel Ltd. is weighing a sale of its stake in an e-commerce joint venture as India’s largest steel manufacturer looks to offload non-core assets to pare debt, people with knowledge of the matter said.
The company is working with advisers on a potential sale of its 50% stake in mjunction Services Ltd., an online marketplace for commodities from steel, diamonds to grains and tea, said one of the people, who asked not to be named as the discussions are private. The steel maker is seeking a valuation of about 14 billion rupees ($197 million) for its stake, the person said. State-owned Steel Authority of India Ltd. holds the rest of mjunction.
A sale will help Tata Steel raise cash at a time the company is struggling with a fall in demand for the alloy as cooling economic growth dents consumption. The firm reported the lowest profit in more than two years for the three months ended June.
Discussions are at a preliminary stage and Tata Steel could decide against a sale, the people said. The manufacturer would need to get consent from SAIL should it decide to go ahead with a deal, the people said.
“As a part of our strategy, we continuously look at opportunities to rationalize our portfolio including divestment of assets and investments which are non-strategic and non-core,” a representative for Tata Steel said in an email, without elaborating. A representative for SAIL didn’t immediately respond to requests for comment.
Founded in 2001, mjunction has a workforce of about 900 people at 41 locations in India and abroad with transactions reaching 1.48 trillion rupees in the year through March, according to its website. -Bloomberg
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