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Subscribe to Tata Steel FPO: Emkay
Follow-on public offer of country's largest steel maker Tata Steel is opened for subscription. It has fixed price band of Rs 594-610 a share for its FPO of 5.7 crore ordinary equity shares of Rs 10 each.
Follow-on public offer of country's largest steel maker Tata Steel is opened for subscription. It has fixed price band of Rs 594-610 a share for its FPO of 5.7 crore ordinary equity shares of Rs 10 each.
Emkay Global Financial Services has assigned accumulate rating on the stock and maintained target price of Rs 712/ share.
The report says, "We believe higher raw material costs especially for coking coal and iron ore would continue to have their negative impact on the industry as a whole. Though, the Indian operation is almost insulated to this due to better backward integration, however, the European operation would continue to feel the pain in the near- medium term. Despite this, the strategy by the company to strengthen its balance sheet and partially integrate its European operation from H2FY12, helps us to maintain a positive view on the stock. At the CMP of RS 632, the stock is trading at 6.2x its FY12E EPS and 4.1x FY12E EV/EBITDA."
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