Tata Steel increases stake in Tata Steel Advanced Materials

In a statement, Tata Steel (TSL) disclosed that it has paid about Rs 19.90 crore for 1,55,34,738 equity shares in Tata Steel Advanced Materials (TSAML), a wholly-owned subsidiary.

TSL has entered the new materials business (NMB) in a variety of fields, including composites, graphene, and medical materials. As the anchor company to seek business prospects in NMB, TSAML, a completely owned subsidiary of Tata Steel, has been chosen.

TSl acquired 1,55,34,738 equity shares worth Rs 10 each, for a total of about Rs 19.90 crore (here in after referred to as the “Transaction”), at an issue price of Rs 12.81 per share (including a premium of Rs 2.81 per share), of Tata Steel Advanced Materials (TSAML), a wholly-owned subsidiary of the Company.

TSL will own a 75.94% stake in TSAML following the completion of the aforementioned deal, with Tata Steel Downstream Products holding the remaining 24.06%. In contrast, TSL will retain 100% of TSAML both directly and indirectly because TSL serves as the holding company for TSDPL.

With an annual crude steel capacity of 34 million metric tons, Tata Steel Group is one of the top steel producers in the world.

In comparison to the net profit of Rs 9,598 crore reported by the company in Q3 FY22, Q3 FY23 had a consolidated net loss of Rs 2,502 crore. Rs 57,084 crore was the total revenue from operations for the quarter, a 6% YoY decrease.

Previously, on a preferential basis, TSL purchased 1,15,45,667 equity shares of its indirect subsidiary TSL Advance Material for a price of $12.81 per share.

The deal resulted in an investment of around Rs. 14.80 crores. After the acquisition was completed, Tata Steel directly owned 66.75 percent of Tata Steel Advance Material, with the remaining holdings transferred to TSL Downstream Projects, a direct wholly-owned subsidiary ofTSL.

Tata Steel held 46.43 percent of the market share for advance materials before the transaction. Tata Steel Advance Material was able to expand its operations with the help of the new equity investment, according to the company.

Tata Steel’s wholly-owned subsidiary, TSL Advance Material, was established in June 2012 as a separate legal entity. It was given to TSL Downstream Products in the fiscal year (FY) 21. TSL has gotten into the business of making innovative materials such as composites, graphene, and medicinal materials, but TSL Advanced Materials has yet to start up.

The BSE’s share price of the stock dropped 1.45% to Rs 105.50.