In a strategic move to become the largest manufacturer of cold-rolled steel in the country, Essar Steel Ltd is planning to acquire a majority stake in the Ajmera Group's Shree Precoated Steels for Rs.700 crore.
The deal will give Ruia-owned Essar Steel control over Mumbai-based realty player Ajmera Group's steel business, reported The Economic Times and DNA, citing sources.
Ajmera has been trying to exit its steel business for the past two years and has been in talks with major steel firms including JSW Steel and Tata Steel for the sale.
The move will enhance Essar's presence in the value-added steel market and make it one of the largest players in the cold-rolled segment, which typically commands a premium of above 30 per cent over hot rolled coils.
"We are waiting for Shree Precoated to respond to the offer as there are other companies involved in the deal," a company official at Essar told DNA.
The acquisition would give Essar Steel control over Shree Precoated Steels' manufacturing unit and over 200 acres of land at Ranjangaon near Pune.
Colour coated steel and galvanised steel, which are made at Shree Precoated Steels, are used extensively by automobile manufacturers.