1:10 Split, 2.23% Yield: Tata's Steel Stock At New 1-Year High, Rallying To Rs 170-180 Targets Of 3 Brokerages

Steel giant, Tata Steel which is backed by conglomerate Tata Group, emerged among the top gainers on BSE and NSE during the April 1st trading session. Tata Steel rallied to nearly 4% to hit a lifetime high of Rs 161.80 apiece. The steelmaker is closing in on target prices of Rs 170 and Rs 177 betted by 3 brokerages. These are JP Morgan, Fisdom and Axis Securities at the latest.

Tata Steel shares rally after it fundraises Rs 2,700 crore via allotment of NCDs, and thousands of crores of investment plan in Neelachal Ispat Nigam.

Tata Steel Share Price:

At the time of writing, Tata Steel shares traded at Rs 161.30 apiece, up by 3.5% on BSE with a market cap of Rs 2,01,357.93 crore. The stock gained as much as 4% when it touched a new 52-week and all-time high of Rs 161.80 apiece.

YTD, the stock is up by 15%, while in a year, the stock rallied by over 55% on BSE.

Tata Steel Big Announcements:

In a postal ballot released by Tata Steel last week, showed that the company received approval for investments in Neelachal Ispat Nigam.

Tata Steel received approval for three transactions. Firstly, to ensure continuity of operations at NINL for the sustenance of its business, to take advantage of the existing business synergies and the Company's focus towards enhancing the production capacity of NINL, Tata Steel has proposed to goods and services deal for Rs 10,850 crore in FY25.

Further, considering the underlying objective of optimising the funding structure in NINL by way of long-term equity support and meeting the capex requirements towards the expansion plan of NINL, the Company may invest in NINL through equity infusion for an aggregate amount of up to Rs 6,600 crore, over next two years from the date of approval of the shareholders.

NINL has a steel manufacturing capacity of 1.1 MTPA, a captive power plant of 62MW and captive iron ore mines of ~90 MT. The facility is situated near the Company's steel plant at Kalinganagar, Odisha, India.

Also, the board approved TSGP's selling raw materials to NINL and provides support services to NINL to smoothen its manufacturing process and other business transactions. This transaction is proposed to be entered into during FY 2024-25 for an aggregate value of up to Rs 3,400 crore.

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 issuance is Rs 2,700 crore. 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.

Tata Steel Corporate Affairs:

Tata Steel has carried 1 bonus issue and 1 stock split while holding a strong track record of dividend payouts.

Bonus Issue: Tata Steel issued a bonus in the ratio of 1:2 in August 2004.

Stock Splits: The company turned ex-split recently in July 2022 to the tune of 1:10. The face value of Rs 10 each in Tata Steel has split into to Rs 1 each since then.

Dividend: Since May 2001, Tata Steel has delivered up to 29 dividends, as per Trendlyne data. In the past 12 months, the dividend payout was Rs 3.60 per share. However, Tata Steel's highest dividend payment is Rs 51 per share. On the current market price, Tata Steel has a dividend yield of 2.23%.

Tata Steel Rallies To Touch 3 Brokerages Target:

The current upside is likely to continue in Tata Steel on its healthy outlook. That will also lead to a fresh breakout in Tata Steel shares, resulting in touching targets of Rs 170-Rs180 as of the latest.

Three brokerages have set the highest target price between Rs 170-180. JP Morgan and Fisdom have set the target price of Rs 170 per share on Tata Steel, while the latest to join the bandwagon is Axis Securities which predicts a target of Rs 177 in the steel giant.