At the time, TRF shareholders were offered 17 shares of Tata Steel for every 10 shares of TRF, representing a 53 percent discount. However, this discount narrowed to 10 percent based on the closing price on February 6th. On February 7th, TRF shares surged by 20 percent to hit the upper circuit, following Tata Steel’s decision to cancel the merger due to the unfavorable swap ratio.
By 11:15 am, TRF was trading at its upper circuit limit of Rs 327.70 on the NSE. Tata Steel stated in an exchange filing, “Since the announcement of the proposed merger of TRF in September 2022, Tata Steel has continuously offered substantial operational and financial assistance through order placements and capital infusion.”
“Benefiting from Tata Steel’s proactive assistance, TRF has effectively managed to overcome a significantly challenging operational landscape, experiencing a notable improvement in its business operations.”
In September 2022, Tata Steel had unveiled plans for a merger involving seven of its group entities, including itself, although the swap ratio offered for TRF was deemed unfavorable.
At one point, TRF shareholders were offered 17 shares of Tata Steel for every 10 shares of TRF, representing a 53 percent discount. However, based on the closing price of February 6, this discount had decreased to 10 percent. TRF shares have surged by nearly 97 percent over the past year. Presently, its market capitalization stands at Rs 360 crore, with Tata Steel owning a 34 percent stake in the company.
In September 2022, Tata Steel greenlit a consolidation plan encompassing Tata Steel Long Products, The Tinplate Company of India, Tata Metaliks, TRF Limited, Indian Steel & Wire Products, Tata Steel Mining, and S&T Mining Company.
Tata Steel’s integration with Indian Steel & Wire Products is progressing well, while the TRF merger has been halted. The consolidation of the remaining entities has been finalized.
“The merger of five companies, collectively generating an annual turnover of approximately Rs 19,700 crore in FY23, within an unprecedented timeframe, offers a distinctive chance for streamlining downstream operations,” stated the company.
The proposed scheme aims to enhance operational integration and optimize facility utilization, elevate customer satisfaction and service standards, streamline working capital and cash flow management, expedite project execution, and rationalize logistics expenses.