Tata Steel Rises After Rs 636 Crore Acquisition; Brokerages Turn Bullish With 27% Upside; Is It Time to Buy?

Tata Steel Share Price Today: Tata Steel shares ended in green, a day after the company announced the acquisition of Rs 636 crore Thriveni Pellets Private Limited ('TPPL').The company had agreed to acquire a 50% stake in Thriveni Pellet, with the remaining stake set to be owned by Llyods Metals & Energy (LMEL).

Tata Steel shares opened 0.66% higher at Rs 167.45 per share on BSE. The metal stock later surged 1.23% higher and was trading at Rs 168.4 per share. Tata Steel shares closed 2.56% higher at Rs 166.35 per share on BSE with a market capitalisation of Rs 2,07,662.07 crore on Thursday, December 11.

Tata Steel Acquisition

Tata Steel's board of directors had considered and approved the acquisition of 50% equity stake in Thriveni Pellets Private Limited (TPPL) from Thriveni Earthmovers Private Limited ('TEMPL') for Rs 636 crore, stated the company in its BSE filing on Wednesday.

Thriveni Pellets holds a complete stake in Brahmai River Pellets Limited (BRPL), which operates a 4 MTPA pellet plant at Jajpur, Odisha, along with a 212 Kilometre slurry pipeline. After the acquisition, 50% of TPPL's stake will be held by Tata Steel, whereas the remaining 49.99% will be owned by Llyods Metals & Energy Limited ('LMEL').

Tata Steel Share Price Recommendation

Tata Steel is poised to get the benefit of TPPL acquisition in the long-run, noted Motilal Oswal in its report on Friday. "The 4mtpa pellet capacity and slurry pipeline will strengthen feedstock security for upcoming expansion. It would also support against some of the expiring iron-ore mine leases in FY30," stated the brokerage in its report.

The brokerage has recommended a target price of Rs 210 per share, indicating a 27% upside in its valuation. "At CMP, TATA is trading at 6.5x EV/EBITDA and 1.8x FY27E P/B. We maintain our BUY rating with an SOTP-based TP of INR210, based on Sep'27E EPS," noted the brokerage in its report.

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