On Wednesday, Tata Steel announced that its board decided against merging TRF Ltd, as the company is seeing improvements in its business performance. Earlier, Tata Steel had planned to merge nine strategic businesses, including TRF, but they have opted not to pursue the amalgamation. Both Tata Steel and TRF boards made this decision. Tata Steel has been aiding TRF with orders and funds. Furthermore, Tata Steel has already merged five businesses, such as Tata Steel Mining Ltd and Tata Steel Long Products Ltd, with more mergers underway.
Tata Steel and TRF Ltd Decide Against Merger
Tata Steel stated that both companies’ boards have opted not to proceed with the amalgamation process. With Tata Steel’s active support, TRF has managed to navigate a challenging operating environment and has seen a turnaround in its business performance.
Since announcing the intended merger, Tata Steel has provided substantial operational and financial support through order placements and fund injections. Additionally, Tata Steel reported the successful integration of five businesses after completing regulatory processes, with ongoing integration efforts.
The merger involved several companies. Tata Steel Mining Ltd, which had an annual turnover of Rs 5,000 crore in FY23, was merged effective September 1, 2023. Tata Steel Long Products Ltd, with an annual turnover of Rs 7,464 crore in FY23, was merged on November 15, 2023. S&T Mining Company Ltd merged on December 1, 2023, and The Tinplate Company of India Ltd, with an annual turnover of Rs 3,983 crore in FY23, merged on January 15, 2024. Tata Metaliks Ltd, with an annual turnover of Rs 3,260 crore in FY23, was merged on February 1, 2024.
The merger of these five companies, collectively generating an annual turnover of approximately Rs 19,700 crore in FY23, happened swiftly. Tata Steel views this as a significant opportunity to consolidate its downstream operations.
Tata Steel to Drive Growth Through Amalgamation
Tata Steel aims to enhance growth in value-added segments by utilizing its nationwide marketing and sales network. The merger is expected to add value and create synergies through enhanced raw material security, centralized procurement, optimized inventories, reduced logistics costs, and improved facility utilization.
The company also mentioned that the merger process of Bhubaneswar Power Private Ltd (a wholly-owned subsidiary of Tata Steel), Angul Energy Ltd (Tata Steel shareholding – 99.99 per cent), and The Indian Steel and Wire Products Ltd (Tata Steel shareholding – 98.15 per cent) is in advanced stages with the respective jurisdictional company law tribunals. It is anticipated to be completed by Q1FY25, pending regulatory approvals.
Tata Steel and TRF Ltd Partner in Material Handling Projects
Tata Steel and TRF Ltd, its associate company, handle turnkey projects for infrastructure sectors like power and ports and industrial sectors such as steel plants, cement, fertilizers, and mining.
TRF manufactures material handling equipment at its facility in Jamshedpur. Together, they execute various projects in the material handling domain.