Tata Metaliks was locked at 20% upper circuit at Rs 140.40 at 15:18 IST on BSE after Tata Steel decided to file an application before the High Court of Bombay seeking recall of its earlier order sanctioning merger of the company with Tata Steel.
Shares of Tata Steel were up 0.32% at Rs 327.40.
Meanwhile, the S&P BSE Sensex was up 108.20 points or 0.42% at 25,761.43.
On BSE, so far 5.44 lakh shares of Tata Metaliks exchanged hands compared with average daily volume of 69,847 shares in the past one quarter. The stock's current price of Rs 140.40 is also its 52-week high for the counter. The stock hit a low of Rs 117.90 so far during the day. The stock had hit a 52-week low of Rs 78 on 12 February 2016. The stock had outperformed the market over the past one month till 16 May 2016, gaining 5.83% compared with the Sensex's 0.1% rise. The scrip had also outperformed the market in past one quarter, advancing 34.25% as against Sensex's 10.61% rise.
The small-cap company has equity capital of Rs 25.29 crore. Face value per share is Rs 10.
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Tata Steel announced during market hours today, 17 May 2016 that its committee of directors constituted by the board of directors approved the proposal of the company to file appropriate application before the High Court of Bombay seeking recall of its earlier order dated 21 August 2015, sanctioning the scheme of amalgamation between Tata Metaliks and Tata Metaliks DI Pipes with Tata Steel.
As per the scheme approved by the shareholders of Tata Steel in May 2014, the swap ratio for public shareholders was four equity shares of Rs 10 each of Tata Steel for every twenty nine equity shares of Rs 10 each held in Tata Metaliks.
The scheme is currently not effective since the petition filed by Tata Metaliks with the High Court of Calcutta for approval of the scheme is pending for disposal. Accordingly, Tata Metaliks has been advised to consider withdrawing the scheme with a leave to re-file a fresh scheme for merger of Tata Metaliks DI Pipes with Tata Metaliks, Tata Steel said in a statement.
Koushik Chatterjee, Group Executive Director (Finance and Corporate) Tata Steel said that the decision is based on careful consideration of various factors including, inordinate delay in obtaining requisite regulatory and statutory approvals along with significant dilution in the intended synergies that were envisaged in April 2013. Tata Steel continues to strategically support Tata Metaliks in its journey towards making it a profitable and value creating company for the future, Chatterjee said. With the latest decision, Tata Metaliks will continue to operate as a subsidiary company of Tata Steel, he added.
Tata Steel held 50.09% stake in Tata Metaliks as per the shareholding pattern as on 31 March 2016.
Tata Metaliks' consolidated net profit rose 71% to Rs 48.62 crore on 10.1% decline in net sales to Rs 347.69 crore in Q4 March 2016 over Q4 March 2015.
Tata Metaliks is a leading producer of foundry grade pig iron in the country.
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