Merging company

Tata Group merges 7 companies with Tata Steel – The New Indian Express

By Express press service

NEW DELHI: In its effort to synergize its metallurgical business, Tata Steel is merging six of its subsidiaries and one associated company with itself. These include listed entities such as Tata Steel Long Products Ltd (TSLP), The Tinplate Company of India Ltd (TCIL), Tata Metaliks Ltd (TML) and TRF Ltd.

The merger of 7 subsidiaries includes 4 listed and 3 unlisted companies. According to Tata Steel, this scheme is in line with its strategy of simplifying the structure of the group and it would allow synergies in logistics, supply, strategy and expansion projects.

Tata Steel also says it will create additional value for shareholders. “The proposed merger will provide an opportunity to reduce operational costs through the transfer of intermediate products between the companies, better order loads, synergies of sales planning and production across the company” , the company said in an exchange filing.

Analysts who follow the industry have also hailed the development, with some saying it could lead to annual savings of Rs 800 crore. “The merger is a positive step as it will simply change the structure of the business, plug leaks of additional royalty payments on intercompany iron ore transfers, reduce corporate overhead, allow various companies with greater financial flexibility to progress on growth projects and bring more operations, sourcing and tax synergies,” said Jatin Damania, Vice President – ​​Fundamental Research, Kotak Securities Ltd.

He added: “Pending guidance from the company on potential synergies, we estimate annual savings of Rs 750-800 crore, equity dilution of 2.2% and potential EPS increase of 1.5 at 2%. The program will require various regulatory and shareholder approvals and is expected to be completed by the end of fiscal 2024E. »

In its note, Edelweiss Securities said it does not see much impact on Tata Steel stock in the short term, as the dilution will be offset by the additional Ebitda (earnings before interest, tax, depreciation and amortization) from subsidiaries/cost savings.

NEW DELHI: In its effort to synergize its metallurgical business, Tata Steel is merging six of its subsidiaries and one associated company with itself. These include listed entities such as Tata Steel Long Products Ltd (TSLP), The Tinplate Company of India Ltd (TCIL), Tata Metaliks Ltd (TML) and TRF Ltd. The merger of 7 subsidiaries includes 4 listed and 3 unlisted companies. According to Tata Steel, this scheme is in line with its strategy of simplifying the structure of the group and it would allow synergies in logistics, supply, strategy and expansion projects. Tata Steel also says it will create additional value for shareholders. “The proposed merger will provide an opportunity to reduce operational costs through the transfer of intermediate products between the companies, better order loads, synergies of sales planning and production across the company” , the company said in an exchange filing. Analysts who follow the industry have also hailed the development, with some saying it could lead to annual savings of Rs 800 crore. “The merger is a positive step as it will simply change the structure of the business, plug leaks of additional royalty payments on intercompany iron ore transfers, reduce corporate overhead, allow various companies with greater financial flexibility to progress on growth projects and bring more operations, sourcing and tax synergies,” said Jatin Damania, Vice President – ​​Fundamental Research, Kotak Securities Ltd. EPS of 1.5-2%. The program will require various regulatory and shareholder approvals and is expected to be completed by the end of fiscal 2024E.” In its note, Edelweiss Securities said it did not see much impact on Tata Steel stock in the short term, as the dilution will be offset by the additional Ebitda (earnings before interest, tax, depreciation and amortization) of the subsidiaries. ales/cost savings.