Tata Stocks: 1 Smallcap Stock Hits New High, 20% Upper Circuits And The Reason Is Tata Steel

Tata Group's industrial products maker, TRF shares went off the roof, hitting a new 52-week high and 20% upper circuits in the same day. The reason for the humungous bullish trend in smallcap TRF shares is another Tata stock, which is a behemoth in the steel market, Tata Steel.

On BSE, TRF shares locked at a new 52-week high of Rs 328.40 apiece. This is the new 52-week height. Also, it is the 20% upper circuit. This meant that on Wednesday there were several buyers in TRF but no sellers.

In its regulatory filing, on Wednesday, TRF said, the Board, has on February 6, 2024, decided not to proceed with the
Scheme and approved withdrawal of the Scheme. In concurrence with the decision of the Board, the Board of Directors of Tata Steel has also consented to the withdrawal of the Scheme."

In September 2022, Tata Steel agreed with a host of Tata Group companies to amalgamate them within its ambit. TRF was one of them to be amalgamated with Tata Steel.

The reason behind the scheme was that the amalgamation will consolidate the business of TRF and the Company 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.

Tata Steel 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. The Company also has a well-established distribution network.

While TRF is primarily engaged in the business of undertaking turnkey projects of material handling for the infrastructure sector and also in the production of such material handling equipment.

TRF said, "Over the last few quarters, the Company has seen improvement in business performance owing to ongoing significant support from Tata Steel in the form of placement of order(s) and infusion of capital coupled with Company's efforts on enhanced debtor collections and, cost and asset optimization."

Accordingly, both TRF and Tata Steel's board decided to withdraw from the scheme.

TRF shares have witnessed a huge rally in recent times. In the past five trading sessions, the stock gained by nearly 28% on BSE, while its upside is over 72% in six months. In a year, TRF shares are up by nearly 97%, moving closer to becoming a multi-bagger.

TRF is scheduled to meet on Monday, February 12, 2024, to consider and take on record the unaudited Standalone and Consolidated financial results of the Company for the quarter and nine months ended December 31, 2023.