Change in plans: Tata Steel may retain up to 30% stake in South East Asian units

In response to a query on the development, Tata Steel said: “In pursuit of its long-term strategy to create sustainable value for its shareholders, Tata Steel periodically undertakes strategic assessment and review of its portfolio including overseas business.

"Tata Steel will continue to consider all strategic decisions including portfolio restructuring options in a responsible manner taking into account the interests of stakeholders including employees. However, as there is no firm proposal for consideration currently, the company has no further comment to make in this matter.”

The stake sale is part of Tata Steel's strategy under CEO and Managing Director TV Narendran to refocus its energy and resources into India. Even as it looks to dilute stake in its South East Asian units, Tata Steel has forged a joint venture with thyssenkrupp for its European operations.

Now it wants to possibly follow the JV model in South East Asia too.

Suitors The acquisition of the two units had marked Tata Steel's first steps in going global.

It acquired NatSteel in 2004 for about 480 million Singapore dollars. A year later, the Indian major picked up Millennium Steel for $400 million, which included debts of $225 million.

The two units, which will be sold together, have seen interest from multiple players, including private equity companies.

Sources had earlier told Moneycontrol that the two units could be valued at $500 million. "Couple of private equity players have shown interest," an executive had said.

But here too, Tata Steel now prefers a steelmaker to come over and pick up its stake in NatSteel and Tata Steel (Thailand). The two units have a combined steel capacity to make two million tonne a year.