Tata Steel puts off amalgamation plans with TRF, successfully merges 5 businesses, 3 in the works, stock rallies

Tata Steel has put off its amalgamation plans with TRF, the company informed the exchanges on February 7. Of the nine companies it had announced strategic plans in September 2022, five have been completed successfully, while three are in process, it added.

The amalgamation process for TRF has been abandoned as per the decision of both companies' boards, it said. The shares of TRF jumped over 20 percent to hit 52-week high of ₹327.70 on Wednesday, meanwhile, Tata Steel share price also gained over 2 percent and hit 52-week high.

Since the initial announcement in September 2022, Tata Steel has provided significant operational and financial support to TRF, leading to a positive turnaround in its business performance amidst a challenging operating environment, it added.

Strategic Plan for Amalgamation - Overview So Far

Tata Steel has completed the amalgamation process for five businesses. The merged entities and their effective dates are as follows:

1. Tata Steel Mining - Annual turnover in FY23 was ₹5,000 crore in FY23, merged effective September 1, 2023

2. Tata Steel Long Products - Annual turnover of ₹7,464 crore in FY23, merged effective November 15, 2023

3. S&T Mining Company - Merged effective December 1, 2023

4. The Tinplate Company of India - Annual turnover of ₹3,983 crore in FY23, merged effective January 15, 2024

5. Tata Metaliks - Annual turnover of ₹3,260 crore in FY23, merged effective February 1, 2024

This consolidation, with a cumulative annual turnover of approximately ₹19,700 crore in FY23, is set to enhance downstream operations. Tata Steel aims to leverage its nationwide marketing and sales network for growth in value-added segments, it said.

The amalgamation is expected to bring value through raw material security, centralised procurement, inventory optimization, reduced logistics costs, and enhanced facility utilisation.

The merger processes for three other companies — Bhubaneswar Power, Angul Energy, and The Indian Steel and Wire Products — are in advanced stages with the respective jurisdictional company law tribunals, as per the filing. These processes are expected to conclude by Q1FY25, subject to regulatory approvals.