TRF is a big newsmaker in today’s session; the stock, which had closed yesterday at Rs.273.70, opened a tad lower at Rs.272.15 but soon zoomed up to its 20% UC and new 52-week high at Rs.328.40, where it now remains frozen.
The stock hit the roof on the company’s announcement that it has called off the proposed scheme of amalgamation with the parent company, Tata Steel.
This, the company said is on account of improvement in business performance owing to ongoing significant support from Tata Steel in the form of placement of order(s) and infusion of capital coupled with the company’s efforts on enhanced debtor collections and, cost and asset optimisation.
So why is the market celebrating a merger being called off? That’s because when the merger was announced last year, the market found the swap ratio unfavourable for TRF – shareholders of TRF were to get 17 shares of Tata Steel for every 10 shares held.
Along with this merger with TRF, Tata Steel had announced merger with six other companies - Tata Steel Long Products, The Tinplate Company of India, Tata Metaliks, Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company. These amalgamations are proceeding as per plans.