Tata Steel rose 1.30% to Rs 105 after the steel major's board approved merging seven Tata Group metal companies into Tata Steel.
The board of Tata Steel approved the amalgamation of seven of its subsidiaries - Tata Steel Long Products, Tata Metaliks, The Tinplate Company of India, TRF, Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company into and with their parent company Tata Steel.Tata Steel Long Products (down 8.39%), The Tinplate Company of India (down 6.01%), TRF (down 5%) and Tata Metaliks (down 2.87%) tumbled.
The decision was taken at a board meeting of the company held on Thursday (22 September). Meanwhile, the earlier merger scheme of Tata Metaliks and Tata Steel Long Products (TSPL) has been withdrawn.
Under the merger scheme: shareholders will receive 17 shares of Tata Steel for every 10 shares of TRF; 67 shares of Tata Steel for every 10 shares of TSPL; 33 shares of Tata Steel for every 10 shares of Tinplate; and 79 shares of Tata Steel for every 10 shares of Tata Metaliks.
Tata Steel said the resources of the merged entities can be pooled to unlock the opportunity for creating shareholder value.
Besides citing other synergies, it also said the mergers will result in utilisation of each other's facilities in a more efficient manner. Marketing and distribution network of all entities can be collaborated, it said.
"In line with group level 5S strategy - simplification, synergy, scale, sustainability, and speed - proposed Scheme will simplify group holding structure, improve agility to enable quicker decision making, eliminate administrative duplications, consequently reducing administrative costs of maintaining separate entities," Tata Steel said.
The merger plan will require the approval of shareholders of all the seven companies as well as those of Tata Steel.
Tata Steel Group is among the top global steel companies with an annual crude steel capacity of 34 million tons per annum.
On a consolidated basis, the steel major's net profit dropped 21% to Rs 7,714 crore on 18.8% increase in net sales to Rs 63128.32 crore in Q1 FY23 over Q1 FY22.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
