India's Tata Steel shares fall 8.7 pct on Corus buy

MUMBAI, Jan 31 (Reuters) Shares in Tata Steel Ltd. , India's largest private sector steel maker, fell as much as 8.7 percent on Wednesday after it agreed to pay 5.75 billion pounds (.3 billion) to buy the Anglo-Dutch Corus Group Plc .

At 0430 GMT, Tata Steel shares had pared some losses but were still down 6.2 percent at 487 rupees in a slightly positive Mumbai market.

Tata's final offer of 608 pence per share in cash for Corus is 34 percent higher than its first offer in October.

Analysts said the valuation was expensive and that it could strain the finances of Tata Steel at least in the short term.

REUTERS SY MIR RAI1011