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Tata metal companies merger a big positive; TRF shareholders will be only losers from this: Analysts

Most of the swap ratio is aligned with prevailing market prices. TRF shareholders will be the only losers as the stock had rallied massively in the last few weeks.

September 23, 2022 / 11:14 IST
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Tata Group on September 23 informed the stock exchanges that it will merge all metal companies with Tata Steel to create an even bigger behemoth. According to the regulatory filing Tata Steel Long Products, The Tinplate Company of India, Tata Metaliks, TRF, the Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company will merge with Tata Steel.

The proposed amalgamation is also part of Tata Steel’s continuing journey to simplify the group holding structure, which analysts believe this is a positive move as it will not just bring synergy but also some savings for Tata Steel.

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“From a strategic perspective, it (merger) makes perfect sense,” said independent market expert Anand Tandon told CNBC TV-18.

The 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.