Shares of these two Tata Group companies jumped up to 3 percent in Friday’s trading session after the National Company Law Tribunal (NCLT) approved the scheme of amalgamation between the companies.
The shares of Tata Steel Limited, with a market capitalization of around Rs 1.65 lakh crores, are trading at Rs 133.80, rising around 3 percent compared to the previous close of Rs 131 apiece.
Moreover, the shares of Tata Metaliks Limited, with a market capitalization of Rs 3,272.53 crores, are currently trading at Rs 1,036.35, gaining approximately 3 percent compared to the previous close of Rs 1,011.25 apiece.
Such bullish stock price movements in both the company’s shares were witnessed after the National Company Law Tribunal (NCLT), Kolkata Bench, pronounced an order sanctioning the Scheme of Amalgamation between Tata Metaliks Limited and Tata Steel Limited.
In September 2022, it was rolled out that a bunch of subsidiary companies, apart from Tata Metaliks, are merging with Tata Steel, viz, Tata Steel Long Products (TSPL), TRF, Indian Steel & Wire Products, The Tinplate Company of India, Tata Steel Mining, and S&T Mining Company.
As per the scheme of arrangement, the shareholders of Tata Metaliks Limited will be receiving ‘79’ shares of Tata Steel Limited against every ‘10’ shares of Tata Metaliks held.
The Board of Directors of Tata Steel Limited proposed the abovementioned amalgamation to reduce costs, greater synergies, and bring higher efficiency. It will also improve agility across the company’s widespread business and show strong parental support from Tata Steel leadership.
In addition, the consolidation of downstream operations will enable growth in value-added segments by creating a competitive edge for Tata Steel’s marketing network as well as nationwide sales.
ICICI Direct, one of the well-known Brokerages based in India, mentioned that the scheme of amalgamation could realize better synergies of business of the entities involved in the scheme.
Written by Amit Madnani
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
