so many companies involved and getting merged to Tata steel.
Whch companies benefit the most from this merger? n vl v gt any chnce to buy or is it too late?
Metal is cyclical business. There should be future chances to buy
TATA steel consolidated as one company is a great news for the company.
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A question to the experts here.
Currently Tata Steel market price is 105.15. Assuming, I have done all the due deligence and vetted the company and assuming I wish to buy this stock.
Instead of buying Tata Steel, if I buy Tinplate Company of India which is getting merged with Tata Steel and its current price is 318. For every 10 shares of tin plate, the swap is 33 shares of tata steel.
So if I buy 10 shares at 318 = 3180. This will translate to 33 shares of tata steel in future
With 3180, I can only buy 30 shares of tata steel at 105 per share
Is it not better to buy Tinplate company now instead of Tata Steel. I will get extra 3 shares.
Is my thought process right or am I missing out on something.
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One thing I can think of.
What if Tata steel gives dividend and tinplate doesn’t before the merger actually takes place.
I am a strong believer of no arbitration gain for retailers. If you have thought about it, don’t you think others also have thought about it? When it’s an open secret then you can’t make any riskless profit.
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I had decided on buying Tata Steel. Now, this news comes in today. Hence instead of buying Tata Steel directly today I bought tinplate based on the above calculation. All things remaining the same.
All I wanted to know is if this equation is ok as of date or is there any hidden elements.
Dividends is something which happens in future - what if tinplates declare dividends instead of tata steel, all this are moving parts.
All other points are irrelevant of what I thought and others thought, risk less profit etc. I am an investor and buy to hold and my average cost is what it matters.
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Looks right to me.
Yes, your thought process is right. Such arbitrage opportunities keep on popping up when mergers are announced. But will vanish in couple of days as prices of both stocks align with merger ratios.
As such recently there was similar opportunity in HDFC and HDFC bank merger which was exploited by PPFAS flexicap fund and explained in their monthly letter
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Steel companies like JSPL and Tata Steel look excellent for a one- to two-year hold at the current level following a downturn. Investing in Tata Steel and other steel stocks would be extremely beneficial to those who have a long term investment goal. If someone has patience and is willing to wait a year, these stocks can rise a lot, enhanced by both inflation and demand.
I believe Tata Steel’s amalgamation with seven more corporations will bring a positive impact on its already large and extensive corporate structure by simplifying it, increasing business outlets and functionality. Hence, its stocks are likely to grow more.
Its going really well for Tata.
Tata Steel is almost at a dominance. Other than being a reliable company with outstanding performance over the years, as the steel business will spread every year because of development, it is also a good stock to buy.
According to the merging plan, each Tata Steel BSL stakeholder will receive one fully paid-up equity share of Tata Steel for every fifteen shares they own. The future is bright for each of the combining companies’ enterprises. According to him, some of these businesses can grow considerably more quickly thanks to the company’s increased flexibility, which is part of Tata Steel’s enterprise strategy.
The merger, according to Tata Steel, is also a step in its ongoing effort to streamline the group holding structure.
Cant wait to see their performance in the next years
This has already happened in Nov 2021 and Tata Steel BSL shares is delisted. This thread is about the latest announcement of merger of six subsidiary companies.
What happens if I hold say 2 shares of Tinplate Co? how will the share swap work?
quantity of your holding which not in exact multiple as per ratio , will result in fractional entitlement . all such fractions are transferred to a trust appointed which will club and sell at nse/bse. net realization from broker will be paid to erstwhile fractional holders .
this applies in bonus , split , merger , demerger or even in reduction of capital unless the scheme clearly mentions that fractions will be ignored.
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Only problem appears to be no definite timeline within which merger takes place… I tried to search various news item, company announcements but there is no mention about the timeline