Tata Steel will hold a shareholders’ meeting today (January 25, 2024), where the company will consider its merger with subsidiary Indian Steel and Wire Products, as per a filing with the exchanges.
“The NCLT has directed, inter alia, that a meeting of the Equity Shareholders of the Transferee Company (Tata Steel Limited) be convened and held on Thursday, January 25, 2024, through video-conferencing or other audio-visual means (‘VC/OAVM’) (‘Meeting’) to consider and if thought fit, with or without modification(s), approve the Scheme,” the company said.
The meeting will be conducted through audio-visual medium at 11 am on January 25.
Tata Steel merger plan
Tata Steel approved the merger of its subsidiary Indian Steel and Wire Products along with the amalgamation of six more subsidiaries in 2022. The company had approved the amalgamation of Tata Steel Long Products, Tinplate Company of India, Tata Metaliks, TRF, The Indian Steel & Wire Products, Tata Steel Mining Limited, and S&T Mining Company with Tata Steel, according to its stock exchange filing released on September 22, 2022.
The approved merger of the subsidiary entities into Tata Steel would help the firm unlock the opportunity for creating shareholder value. The proposed amalgamation would also ensure the use of best practices, cross-functional learnings, and utilization of each other’s facilities in a more efficient manner. The merger would also allow the collaboration of the marketing and distribution network of both entities, the company said in its BSE filing.
At the beginning of 2023, Tata Steel CEO and Managing Director TV Narendran had said the proposed merger of a total of seven subsidiary companies with Tata Steel will likely be completed in the current financial year, ie FY 23-24. He also added that the timeline of the merger depends on the regulatory processes including NCLT clearances.
Tata Steel’s board on January 24 approved the issuance of over 99 million new shares in the ratio of 79 shares of Tata Steel for every 10 shares of Tata Metaliks for their merger. The record date for this will be February 6.
Tata Steel posts profit in Q3 even as Europe ops bleed
Tata Steel turned the corner during the quarter ending December 31, 2023, aided by a stronger performance in its India unit even as its European business continued to haemorrhage capital. The company reported a consolidated profit of ₹522 crore during the quarter compared to a loss of ₹2,502 crore in the corresponding quarter last year and ₹6,511 crore in the preceding quarter.
The recovery was primarily led by the domestic unit of Tata Steel, which reported a pre-tax, depreciation and interest profit of ₹8,257 crore compared to ₹5,335 crore last year. Meanwhile, Europe reported a loss of ₹2,872 crore before tax, depreciation, interest and exceptional items.
“The UK business continues to face production shortfalls arising from the end-of-life condition of several of its heavy end assets. Subdued demand weighed on the margins of the better-performing Netherlands business too,” said Koushik Chatterjee, executive director and chief financial officer, of Tata Steel.
While the company turned the corner during the quarter, Narendran maintained that the business environment was tough. “Global operating environment has been complex, with the economic slowdown in China and geopolitics weighing on commodity prices in general,” he said.
During the December quarter, China exported between 7 and 8 million tonnes of steel every month, he said, which is the highest since 2015. This, he claimed, has adversely impacted global steel prices as well as profitability. “Despite this context, Tata Steel India has delivered better margins aided by higher deliveries as well as realisations on a QoQ basis,” he said.
On a consolidated basis, the company reported a top line of ₹55,312 crore. This was 3 percent lower year-on-year and less than a per cent lower sequentially. “Among the key segments, automotive and well-established brands such as Tata Tiscon, Tata Steelium and Tata Astrum had best ever 3Q sales,” Narendran said.
