Mumbai: The partly-paid shares of Tata Steel have outpaced the company’s ordinary shares in the recent run-up, resulting in their spread narrowing to less than a per cent on Tuesday. Tata Steel’s partly-paid up shares have surged 497 per cent since March 23 as against the 134 per cent in ordinary shares during the period, thanks to the improving outlook for metals worldwide.“Tata Steel shares have gained in the last few months because the steel cycle is turning positive and we have seen price hikes and volume growth in the last three to four months. That is the reason why we are seeing action in steel stocks,” said Hemang Jani, Head of Equity Strategy, Broking and Distribution at Motilal Oswal. “The debt reduction plan is progressing. When the ordinary shares go up, the partly paid shares go up more because more people are interested in buying lower-priced stocks as initial capital investment is low,” said Jani.Tata Steel partly paid-up shares ended up 3.85 per cent at Rs 180.55 on Tuesday and Tata Steel ordinary shares gained 1.36 per cent to close at Rs 635.20. Tata Steel had allotted partly paid-up shares in March 2018 and took 25 per cent of Rs 615 per share upfront, which was Rs 153.75 apiece. Investors must now pay Rs 461 per share when the company calls for the balance amount. The outperformance in partly paid-up shares has led to the spread between them to converge to 0.94 per cent ((Rs 461+180.55)-635.2) from 80 per cent on March 23 and 93 per cent in April. “The spread had become extreme till 93 per cent but now it has narrowed to less than 1 per cent because metals stocks are in demand led by unprecedented uptick seen in global steel prices,” said Abhilash Pagaria, Senior Management, Edelweiss Alternative Research. 79747141Tata Steel was supposed to take the rest 75 per cent as a first and final call within 12 months but later on, the company took special permission from the Securities and Exchange Board of India for deferring the time horizon till indefinite period. “The company is yet to collect 75 per cent of Rs 615 of Partly Paid-Up Shares as in 2019 they took special permission from SEBI for an extension till indefinite period for collection of remaining payment,” said Pagaria. Indian steel spreads have risen around 25 per cent in the third quarter and are at a three year high. They are expected to remain strong on the back of domestic demand recovery and higher regional prices.