10:1 Split, 1:2 Bonus, 360% Dividend: Tata's Steel Stock In Focus, Big Acquisition Update; BUY/SELL?

Tata Group-backed steel giant, Tata Steel has corrected sharply by 3% in five trading sessions, resisting near Rs 180 levels, and shy of its 52-week high of Rs 184.60 apiece on BSE. Tata Steel's stock price will be in focus on Wednesday after the company acquired a 14.28% stake in IFQM, which is a related-party transaction. Tata Steel is set to pay a 360% dividend after turning ex-dividend last week.

Tata Steel Share Price:

Tata Steel stock ended at Rs 175.70 apiece, down by 1.24% on June 24 on BSE with a market cap of Rs 2,19,334.09 crore. The stock is near its 52-week high of Rs 184.60 apiece.

Tata Steel stock has dipped by 2.95% on BSE in 5 sessions. Nonetheless, the stock rallied by 26% YTD. In a year, Tata Steel stock is up by 60%.

Tata Steel Acquisition Update:

Tata Steel announced on June 25 that it has acquired 1,25,00,000 equity shares of face value Rs 10/- each aggregating to ₹12.5 crore (14.28%) in the Indian Foundation for Quality Management ('IFQM').

IFQM is yet to commence any operations. IFQM has been incorporated as a section 8 company to empower and
encourage Indian organizations in diverse sectors to embrace and integrate quality values, principles, and practices in all aspects of management.

IFQM is a private limited company registered under section 8 of the Companies Act, 2013. Natarajan Chandrasekaran, Chairman of the Company is a Member of the Board of Directors of IFQM. Accordingly, IFQM is a related party to Tata Steel Limited.

Tata Steel Dividend:

Tata Steel turned ex-dividend on June 21, which was also the record date for the final dividend of Rs 3.60 per share for FY24, the same as the payout in FY23. The dividend payment date is fixed on and from July 19, 2024.

Since its bonus issue, Tata Steel has delivered a huge Rs 299 per share dividend. However, its highest dividend payout was Rs 51 per share in 2022, and cumulatively it paid Rs 63.75 per share in that year.

Meanwhile, Tata Steel has issued 1 free bonus share on the existing 1 equity share, taking the ratio to 1:1. Additionally, Tata Steel stock has also turned ex-split in 2022 in the ratio of 10:1.

Tata Steel Share BUY/SELL?

As per Trendlyne data, the consensus recommendation from 28 analysts for Tata Steel Ltd. is HOLD. Of the total, 9 analysts have recommended 'STRONG BUY' and 4 analysts have suggested 'BUY' on Tata Steel.

Antique Stock Broking has recommended BUY with 12-month target price of Rs 190.

Also, Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher told GoodReturns.In that "The stock has maintained the strong uptrend with series of higher lows and higher top formation witnessed on the daily chart and maintaining above the significant 50EMA zone since the last 7-8 months."

Koothupalakkal added, "Recently, there has been some consolidation happening, resisting near the 184 zone and with near-term support maintained near 178 levels, we can expect further rise once the 184 level is breached decisively with targets of 194 and 205 levels visible."

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.