Edited by Deepali Verma
TRF shares hit a 20 per cent upper circuit on February 7 as Tata Steel called off the merger among them, reversing the decision on unfavourable swap ratio.
At 11:15 am, TRF was locked in upper circuit at Rs 327.70 on the National Stock Exchange (NSE).
“After the announcement of the intended merger of TRF in September 2022, Tata Steel has been providing important operational and financial support by way of placement of orders and infusion of funds,” Tata Steel revealed in an exchange filing.
“The active support from Tata Steel has enabled TRF to successfully navigate a highly challenging operating environment, witnessing a turnaround in its business performance.”
Tata Steel in September 2022 made an announcement of the merger between seven of its group companies and itself. However, the swap ratio for TRF was an unfavourable one.
TRF shareholders were to get for 17 shares of Tata Steel for 10 shares of the company, which was a noted 53 percent discount at the time. According to the closing price of February 6, the discount had narrowed to 10 percent.
TRF shares have gained nearly 97 percent over the last year. Its current market capitalisation is Rs 360 crore and Tata Steel holds 34 percent in the stock.
What about the other mergers?
In September 2022, Tata Steel gave its approval to the scheme of amalgamation between Tata Steel Long Products, The Tinplate Company of India, Tata Metaliks, TRF Limited, the Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company.
The merger between Tata Steel and Indian Steel & Wire Products is still in advanced stages, while the TRF merger has been called off. The rest has been completed.
“The merger of five companies with a combined annual turnover of ~Rs 19,700 cr in FY23 presents a unique opportunity for consolidation of the downstream operations,” said the company.
The scheme was put in place to synergise operational integration as well as better facility utilisation; improve customer satisfaction and services; efficiency in working capital and cash flow management; faster execution of projects in pipeline; rationalisation of logistics costs.
At 11.15 am, Tata Steel was quoting at Rs 145.45 on the NSE, higher by 0.5 percent from previous close.
