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Tata Steel: Implication of amalgamation for shareholders

Short-term benefits from proposed amalgamation is likely to be neutralised with the issuance of new shares of Tata Steel.

September 26, 2022 / 10:18 AM IST
Tata Steel: Implication of amalgamation for shareholders

Tata Steel Long Products | CMP: Rs 579.70 | The share price fell over 4 percent after the company posted a surprise net loss of Rs 331.09 crore in the quarter ended June, thanks to higher expenses. The company had a profit of Rs 331.60 in the year-ago period. This was despite its total income rose 24.78 percent to Rs 2,154.78 crore from Rs 1,726.82 crore in the quarter ended June 2021. The company’s expenses almost doubled to Rs 2,489.58 crore from Rs 1,282.59 crore in the same period a year ago.

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Highlights Scheme of amalgamating seven group companies with Tata Steel Timeline for the merger unknown. It is likely to be a complex process Savings from additional royalty payment on iron ore supplied and other procurement benefits Short-term impact likely to be neutralised, given the incremental dilution of equity   Tata Steel’s (TSL, CMP: Rs 104; Market capitalisation: Rs 127,308 crore) board has approved an amalgamation scheme with seven of its group companies with itself, according to stock exchange filings. In terms of revenues, EBITDA (earnings before...

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