Tata Steel will hold a shareholders' meeting today (January 25, 2024) at which the company will consider its merger with subsidiary Indian Steel and Wire Products, according to a filing with the stock exchanges.

“The NCLT has directed, inter alia, that a meeting of the shareholders of the transferor 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 examine the proposal and, if deemed appropriate, approve it with or without modification(s), ” the company said.

The meeting will be held on January 25 at 11 a.m. via audiovisual media.

Tata Steel merger plan

Tata Steel approved merger of its subsidiary Indian Steel and Wire Products and merger of six other subsidiaries in 2022. The company had approved merger 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 the stock exchange filing made on September 22, 2022.

The approved merger of the subsidiaries to form Tata Steel would help the company capitalize on the opportunity to create shareholder value. The proposed merger would also ensure the use of best practices, cross-functional learning and more efficient use of each other's facilities. The merger would also enable collaboration of marketing and sales network of both companies, the company said in its BSE filing.

Earlier in 2023, Tata Steel CEO and Managing Director TV Narendran had said that the proposed merger of a total of seven subsidiaries with Tata Steel is expected to be completed in the current financial year, i.e. FY23-24. He also added that the timing of the merger depends on the regulatory processes including NCLT approvals.

Tata Steel's board on January 24 approved issuance of over 99 million new shares at the ratio of 79 shares of Tata Steel to 10 shares of Tata Metaliks for their merger. The deadline for this will be February 6th.

Tata Steel posts a profit in the third quarter despite declining business in Europe

Tata Steel turned around in the quarter ended December 31, 2023, helped by stronger performance from its India unit, even as its European business continued to lose 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 of last year and ₹6,511 crore in the previous quarter.

The recovery was largely led by Tata Steel's domestic unit, which reported profit before tax, depreciation and interest of 1.5% ₹8,257 crore as compared to ₹5,335 crore last year. Meanwhile, Europe reported a loss of ₹2,872 crore before taxes, depreciation, interest and special items.

“The UK company continues to face production disruptions due to the end-of-life condition of several of its high-performance assets. “Subdued demand also weighed on margins in the better-performing Dutch business,” said Koushik Chatterjee, managing director and chief financial officer of Tata Steel.

While the company turned things around during the quarter, Narendran maintained that the business environment was difficult. “The global business environment was complex, with the economic downturn in China and geopolitics weighing on commodity prices in general,” he said.

In the December quarter, China exported between 7 and 8 million tonnes of steel each month, the highest since 2015. According to him, this has had a negative impact on global steel prices and profitability. “Despite this context, Tata Steel India has delivered better margins on a QoQ basis thanks to higher shipments and sales,” he said.

On a consolidated basis, the company reported sales of ₹55,312 crore. This was a decrease of 3 percent compared to the previous year and less than one percent compared to the previous quarter. “Among key segments, automotive and established brands such as Tata Tiscon, Tata Steelium and Tata Astrum recorded best-ever 3Q sales,” Narendran said.