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Tata Steel Ltd (NS: TISC ) has become the talk of the town after it announced that it is going to merge 7 entities under its umbrella with itself. According to the management, the synergy of this big amalgamation is expected to save costs of around INR 1,500 crores. 

The amalgamation will consolidate these businesses which will result in focused growth, operational efficiencies, and business synergies. In addition, the resulting corporate holding structure will bring enhanced agility to the business ecosystem of the merged entity. The new entity will have an opportunity for the reduction of operational costs through the transfer of intermediary products between companies, better order loads, synergies from sales, and production planning across the business. 

In line with Group level 5S strategy – simplification, synergy, scale, sustainability, and speed – amalgamation will simplify group holding structure, improve agility to enable quicker decision making, and eliminate administrative duplications, consequently reducing administrative costs of maintaining separate entities. 

The supply chain infrastructure and network of all entities can be integrated seamlessly which will facilitate in supply lead times. All these synergies combined will create value for stakeholders including shareholders, customers, lenders, and employees.

Let's have a brief look at which companies are lined up for the merger.

Tata Steel Long Products Limited (TSPL)

Tata Steel Long Products Ltd (NS: TTST ) is primarily engaged in the business of manufacturing steel and offers a broad range of steel products including a portfolio of high value-added downstream products such as hot rolled, cold rolled and coated steel, rebars, wire rods, tubes, and wires. 

As of FY22, the company’s net assets were reported at INR 3,200.47 crores and generated a revenue of INR 6,801.63 crores in the same year. 

Tinplate Company of India Limited (TCIL)

Tinplate Company of India Ltd (NS: TINP ) is a producer of tin-coated and tin-free sheets. The company manufactures various grades of electrolytic tinplates, tin-free steel sheets and full hard cold rolled sheets (FHCR) used for metal packaging.

As of FY22, the company’s assets were reported at INR 1,170.97 crores with a revenue of INR 4,249.51 crores in FY22.

Tata Metaliks Ltd (NS: TMET ) is engaged in the manufacture of foundry-grade pig iron. The company manufactures and sells products, such as scrap pig iron and granulated slag.

Its net assets remained at INR 1,525.27 crores in FY22 and generated net revenue of INR 2,745.53 crores.

TRF Ltd (NS: TTRO ) has a market capitalization of only INR 413 crores and is engaged in the production of material handling equipment for the infrastructure sector. 

Its net assets remained at INR -289.52 crores in FY22 and generated net revenue of a mere INR 127.14 crores

Indian Steel & Wire Products Limited (ISWP)

Indian Steel & Wire Products is an unlisted company and is primarily engaged in the business of manufacture of wire rods, TMT rebars, wires and wire products as an external processing agent of Tata Steel and manufacturers and directly markets welding products, nails, rolls and castings.

Its net assets remained at INR 142.05 crores in FY22 and generated net revenue of INR 354.15  crores.

Tata Steel Mining Limited (TSML)

Tata Steel Mining is also an unlisted company and a wholly owned subsidiary of Tata Steel. TSML has its presence in the manufacture of ferro chrome and has its primary facility situated at Anantapur, Athagarh, District Cuttack. It has also pursued the commercial mining of chrome ore and iron ore and has executed mining leases for three chromite blocks

Its net assets of the company were reported at around INR 77.36 crores in FY22 and generated net revenue of INR 4,605.38  crores.

S & T Mining Company Limited 

S & T Mining is an unlisted business and a wholly owned subsidiary of Tata Steel. The company was engaged in the business of acquiring coal blocks, carrying out exploration, developing mines, extracting and mining of coal from the identified blocks. However, it has been non-operational since FY 2018-19.

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