Tata Steel's board made a significant decision on Wednesday, opting not to proceed with the merger of TRF Ltd. The move comes as TRF Ltd, an associate company, experiences a notable improvement in its business performance. Previously, Tata Steel had announced plans to amalgamate nine strategic businesses, including Tata Steel Long Products, Tinplate Company of India, Tata Metaliks, TRF, The Indian Steel & Wire Products, Tata Steel Mining Ltd, and S & T Mining Company.
In a statement, Tata Steel explained, "Both companies' boards have agreed not to pursue the merger process. With Tata Steel's active support, TRF has successfully navigated through a challenging operational environment, resulting in a positive turnaround in its business performance."
Since the initial merger announcement, Tata Steel has been offering substantial operational and financial assistance to TRF, including placing orders and injecting funds. Furthermore, Tata Steel reported the successful integration of five businesses after completing regulatory procedures.
These integrated entities include Tata Steel Mining Ltd, which achieved an annual turnover of Rs 5,000 crore in FY23, merged effectively from September 1, 2023, and Tata Steel Long Products Ltd, with an annual turnover of Rs 7,464 crore in FY23, merged effectively from November 15, 2023.
Additionally, S&T Mining Company Ltd merged from December 1, 2023, and The Tinplate Company of India Ltd, with an annual turnover of Rs 3,983 crore in FY23, merged from January 15, 2024. Tata Metaliks Ltd, with an annual turnover of Rs 3,260 crore in FY23, merged from February 1, 2024.
The merger of these five companies, with a combined annual turnover of approximately Rs 19,700 crore in FY23, was completed swiftly, offering an opportunity for downstream operations consolidation, Tata Steel noted. This consolidation is expected to facilitate growth in value-added segments by leveraging Tata Steel's extensive marketing and sales network.
Tata Steel also highlighted that the amalgamation would be value-accretive, driving synergies through raw material security, centralized procurement, inventory optimization, reduced logistics costs, and improved facility utilization.
The company added that the merger process involving 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 the final stages with the respective jurisdictional company law tribunals. Completion is anticipated by Q1FY25, subject to regulatory approvals.
TRF Ltd, described as an associate company of Tata Steel, specializes in undertaking turnkey projects for material handling in sectors like power, ports, and industries such as steel plants, cement, fertilizers, and mining. TRF is also involved in the production of material handling equipment at its manufacturing facility in Jamshedpur.
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