1:10 Split, 1:2 Bonus, 29 Dividends: Tata's Steel Giant Allots Rs 2,700 Crore NCDs; Stock Nears 1-Yr High

Tata Group-backed largest steelmaker, Tata Steel Ltd surged to reach near its 52-week high levels on Wednesday as investors cheered on the company's allotment of listed non-convertible debentures aggregating to Rs 2,700 crore. Tata Steel is just Rs 7 away from hitting its all-time high tone. The highest target price in the company is set at Rs 170 per share.

Tata Steel Fundraising:

On March 27, Tata Steel announced that it approved the allotment of 2,70,000 Unsecured, Redeemable, Rated, and Listed, NCDs having a face value of Rs 1,00,000 each, to identified investors. The NCDs have a fixed coupon rate of 7.79%. The issue is on a private placement basis and has a tenure of 3 years.

The NCDs aggregate to Rs 2,700 crore. As per Tata Steel, the NCDs have been issued based on multiple yield allotment methods prescribed by BSE Limited and the Securities and Exchange Board of India, and the issue price of the NCDs has been determined accordingly. The NCDs are proposed to be listed on the Wholesale Debt Market Segment of BSE Limited.

The 3-year tenure starts on March 27, 2024, and will end on March 26, 2027.

Tata Steel Share Price:

Following the allotment of NCDs, Tata Steel's share picked up momentum to hit an intraday high of Rs 154.05 apiece, which was closer to its 52-week high of Rs 159.50 apiece.

After market hours, the stock ended at Rs 152.85 apiece and edged higher on BSE with a market cap of Rs 1,90,809.42 crore.

YTD, the metal heavyweight surged by a little over 9% on BSE. While the stock has given double-digit returns on a half-year and year-on-year basis. In a year, the zoomed by over 49%, while its six-month upside is nearly 21%.

Tata Steel Corporate Affairs:

Tata Steel is among the dividend-paying metal stocks. As per Trendlyne data, the company delivered up to 29 dividends since May 2001. In the last 12 months, the company paid up to Rs 3.60 per share dividend. At the current market price, it has a dividend yield of 2.4%.

So far, Tata Steel has also carried 1 bonus issue and stock split. It turned ex-bonus in August 2004 for its bonus shares in the ratio of 1:2. While it turned ex-split recently in July 2022 for shares sub-division in the ratio of 1:10, which led to its face value reduction from Rs 10 to Rs 1.

Tata Steel Target Price:

At the latest, two brokerages have set the highest target price of Rs 170 per share on Tata Steel, which indicates a potential upside of over 11% on exchanges in the near term. These brokerages are JPMorgan and Fisdom. JP is also having a positive outlook on Tata Steel.

Tata Steel group is among the top global steel companies with an annual crude steel capacity of 35 million tonnes per annum. It is one of the world's most geographically diversified steel producers, with operations and commercial presence across the world. The group recorded a consolidated turnover of $30.3 billion in the financial year ending March 31, 2023.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.