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Tata Group Stocks Fall Up To 9% Today On Mega Merger Plan

Large Cap IT Software Stock Hits 52-Week Low Today, Time To Invest?
Written by Zimmy

Tata Group Stocks: Four Tata Group companies witnessed a loss of up to 9% in their value on Friday in early morning trade soon after Tata Steel Ltd okays the merger of six of its subsidiary companies. However, Tata Steel stock witnessed a surge in trade today with an intraday gain of 1.45% till 11:01 am.

Earlier, a proposal pertaining to the merger has been approved by the Board of the company on Thursday, September 22. According to a statement issued by Tata Steel, “The Board of Directors of Tata Steel considered and approved schemes for the proposed amalgamation of six subsidiaries into and with Tata Steel.”

The subsidiaries include Tata Steel Long Products Limited in which Tata Steel holds 74.91 per cent equity, The Tinplate Company of India Limited (74.96 per cent), Tata Metaliks Limited (60.03 per cent), The Indian Steel & Wire Products Limited (95.01 per cent equity holding), Tata Steel Mining Limited and S & T Mining Company Limited (both wholly-owned subsidiaries), according to a PTI report.

Meanwhile, Tata Steel Ltd gained 1.45% intraday at 105.15 apiece at the time of writing the story. The company has a market capitalization of Rs 1,28,345.55 crore.
The four Tata Group stocks have been listed out of the six subsidiary companies that will be merged with Tata Steel.

These four companies witnessing a decline include Tata Steel Long Products, TRF Ltd, Tinplate Company Of India Ltd, and Tata Metaliks Ltd. Check below to find out the decline in trade today:

  • Tata Steel Long Products Ltd: It has declined by 8.79% intraday at 683 apiece on BSE. It has a market capitalization of Rs 3080 crore. Tata Steel Long Products has fallen maximum among the four stocks.
  • TRF Ltd: The stock has fallen by 5% at 355 apiece till 11:18 am. It has a market capitalization of Rs 391 crore. The stock has also hit its lower circuit at 355.65.
  • Tinplate Company Of India Ltd: The stock registered a decline of 6.38% intraday at Rs 316 apiece. It has a market capitalization of Rs 3,315 crore.
  • Tata Metaliks Ltd: The stock fell by 2.95% till 11:23 am at Rs 777 apiece. It has a market capitalization of Rs 2,453.73 crore.

Why did Tata Steel decide to merge the six subsidiary companies?
Tata Steel said the proposed amalgamation is aimed at driving synergies, simplifying the group holding and management structure, and consolidating and strategically growing downstream operations and engineering capabilities. The Board has considered the proposal based on independent fairness and valuation opinions. It followed the process laid down under the Companies Act, 2013, and Securities and Exchange Board of India Regulations, as per a PTI report.

The proposed amalgamation will enhance management efficiency, drive sharper strategic focus and improve agility across businesses based on the strong parental support from the Tata Steel leadership. “On completion, there will be further opportunities towards reduction of overhead and corporate costs. Each of the proposed amalgamations will be value-accretive for shareholders,” the company said.

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