Tata Steel gains on plans to review merger with Indian Steel & Wire Products
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So far in 2023, shares of Tata Steel have risen around 13.58 percent.
Shares of Tata Steel gained over 1 percent on December 26 after the steel major announced on December 23 that it will hold a meeting for shareholders on January 25 to review the scheme of amalgamation with Indian Steel & Wire Products.
As of 10.30am, the Tata Steel stock was trading at Rs 135.45 on the NSE, higher by 1.4 percent from last closing price.
In 2022, the Tata Steel board had approved a proposal to merge seven of its subsidiaries into itself for greater synergies, higher efficiency and reduced costs.
The seven subsidiaries to be merged with Tata Steel are Tata Steel Long Products (TSPL), The Tinplate Company of India, Tata Metaliks, TRF, Indian Steel & Wire Products, Angul Energy, and Tata Steel Mining and S&T Mining Company.
In line with group level 5S strategy – simplification, synergy, scale, sustainability, and speed – proposed amalgamation will simplify group holding structure by eliminating multiple companies within the group.
It is expected to lead to better utilisation of common facilities, sharing of best practices, elimination of duplication and multiplicity of compliance requirements and rationalisation of administrative expenses among other things.
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The resulting corporate holding structure is expected to bring enhanced agility to the business ecosystem of the merged entity.
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Since 2019, Tata Steel has reduced 116 associated entities (72 subsidiaries have ceased to exist, 20 Associates and JVs have been eliminated and 24 companies are currently under liquidation).
So far in 2023, the shares of Tata Steel have surged around 13.58 percent, underperforming the benchmark Nifty 50, which has given investors returns of around 15 percent.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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