Mumbai: Shares of Tata Steel on Monday slipped almost 6 per cent after the company emerged as the front-runner to acquire debt-laden Bhushan Steel.

On the BSE, the scrip fell 5.82 per cent, or Rs 40.05, to Rs 648.25. During intra-day trades, the counter lost 7.16 per cent to a low of Rs 639.

On the NSE, shares of the company declined 5.92 per cent to settle at Rs 648.85.

Brokers said the stock came under pressure because of concerns that the proposal to acquire Bhushan Steel was on the higher side - a move that could impact its financials in the short to medium term.

Tata Steel has also emerged as the frontrunner to acquire Bhushan Power & Steel. It has reportedly made a bid of Rs 35,000 crore for Bhushan Steel.

In a regulatory filing with the stock exchanges, Bhushan Steel on Monday said Tata Steel, JSW Living Pvt Ltd and a consortium of the company's own employees had submitted bids to take over its assets. It said these resolution plans were presented by the resolution professional (RP) to the Committee of Creditors (CoC) on February 16.

"The RP and its advisers will now review these plans so as to ensure that these plans are in conformity with the provisions of the Insolvency & Bankruptcy Code, 2016 and additional requirements as stipulated by the CoC in the process document. Once the compliant resolution plans are identified, another meeting of the committee will be convened to present the compliant plans for its consideration,'' Bhushan Steel said.

Shares of the company were locked in at the upper circuit on news that Tata Steel was leading the race. On the BSE, the stock finished with gains of almost 20 per cent at Rs 53.80.

Though the markets had its concerns about the acquisition, brokerage Edelweiss said in a note that it would be beneficial for Tata Steel.

"We believe, potential acquisition of these stressed assets (Bhushan Steel and Bhushan Steel & Power) makes strategic sense for Tata Steel, despite the seemingly expensive valuation.

"Our conviction is anchored by likely EBITDA improvement because of higher capacity utilisation and cost-efficient raw material sourcing, market leadership in profitable automotive steel segment and hitting the ground running by expanding market share in a supportive steel cycle,'' Edelweiss Securities, which has a buy rating on the stock, said.

Analysts at the brokerage expect Tata Steel to benefit from the market leadership that the acquisitions will bring and that it can enhance the asset's profitability through higher operating efficiencies and capacity utilisation.