10:1 Split, 360% Dividend: Tata's Steel Stock Hits New High, Big £1.25 Bn Deal Update; BUY For Rs 200 Target

Tata Group-backed steel giant, Tata Steel touched a new 52-week high on BSE and NSE during the trade session of June 12, after the company made a big update on the £1.25 billion deal with the UK government. Tata Steel's stock soared above Rs 180 and has surged by over 30% year-to-date. There is still potential for buying in Tata Steel's share price.

After market hours on June 12, the stock price ended at Rs 182.25 apiece, up by 0.50% on BSE with a market cap of Rs 2,27,510.74 crore. In the trading hours, the stock touched a new 52-week high of Rs 183.85 apiece.

As per the BSE data, the stock's price-to-equity ratio is at 51.20x, while its return on equity (RoE) is at 3.23%.

The upbeat performance comes after Tata Steel clarified UK media reports that claimed policy differences between the UK government and the opposition on its transformation plan.

In its regulatory filing, Tata Steel said, "Tata Steel Limited (the 'Company'/'Tata Steel') confirms that it will continue with the announced closure of the heavy end assets and restructuring program at Port Talbot in the coming months."

Over the last three years, Tata Steel, part of India's Tata Group, one of the UK's largest private sector investors and the UK Government have worked hard to develop a sustainable future for Tata Steel UK and the Port Talbot Plant, it added.

Hence, Tata Steel said, "We are therefore apprehensive reading UK media reports suggesting that the £1.25 billion
investment, the largest in many decades in British steelmaking, may be put in peril due to policy differences expressed by the Conservative and Labour parties, during the ongoing election period. We urge and request the current and the incoming government post-elections, to adhere to and safeguard the agreed terms of the £500 million package of support for the
Electric Arc Furnace (EAF) project announced in September 2023."

Further, the company highlighted that this project has been developed to ensure the production of low-emission high-quality steel in Port Talbot, preserving primary steelmaking in Britain and creating the potential for future green manufacturing
cluster in South Wales.

Also, the company added the current heavy-end assets of Port Talbot are nearing their end of life, are operationally
unstable and are resulting in unsustainable financial losses. The coke ovens, a critical facility for primary steelmaking, had to be closed in March 2024, as operations became infeasible
and unsafe.

Hence, Tata Steel said that it is compelled to continue with its plans to decommission Blast Furnace #5 at the end of June, followed by the decommissioning of Blast Furnace #4 by the end of September. The downstream assets will continue to service customers by utilising imported semi-finished steel till the new EAF is built and commissioned.