Tata Group-backed steel giant, Tata Steel is set to turn ex-dividend on BSE and NSE next week. The stock has rallied by as much as 31% YTD and has fixed June 21 as the record date for the final dividend of 360% for FY24. Another key development in the stock is the company's credit rating which was upgraded by S&P to CreditWatch with positive implications. Prabhudas Lilladher has set a Rs 205 target on the stock.
Tata Steel Share Price:
The steel stock ended at Rs 183.05 apiece on BSE with a market cap of Rs 2,28,509.42 crore. The stock is near its 52-week high of Rs 184.15 apiece. In the trading week from June 10-14, the stock zoomed by 2%. While its month-on-month upside is about 10.5%.
YTD, the stock is up by 31%, and in a year, the gains are nearly 61%. As per BSE data, the stock's price-to-equity ratio is at 51.43x and the return on equity is at 3.23%.
Tata Steel stock will turn ex-dividend on June 21, which will keep it on trend next week.
BUY Ahead Of Tata Steel Dividend Record Date:
Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher said, "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."
The analyst 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."
Tata Steel Dividend:
The company will pay a final dividend of Rs 3.60 per share for FY24, the same as the payout in FY23. For the upcoming payout, the company will determine eligible shareholders on the record date which is fixed on Friday, June 21, 2024. This is also the ex-dividend date. Meanwhile, a 360% dividend will be paid on and from July 19, 2024.
Tata Steel shares have delivered as much as Rs 299 per share dividend since its bonus issue. But its highest dividend payout was Rs 51 per share in 2022, and cumulatively it paid Rs 63.75 per share in that year.
Coming to the bonus issue, the company 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 Credit Rating:
On June 14, S&P Global changed the issuer credit rating of Tata Steel Limited from 'BBB- Outlook Positive' to 'BBB- CreditWatch Positive'
The reason behind the credit rating is due to a possible increase in Tata Group support. S&P highlighted that for example, the holding company led negotiations with the U.K. government for setting up the battery plant and securing government support for the restructuring of Tata Steel's U.K. facility.
This week, Tata Steel confirmed that the Dutch Parliament, in March 2024 formally gave a mandate to the Government to negotiate the terms of potential support towards a proposal for decarbonization in Tata Steel Nederland. Subsequently, the Dutch Government has formulated a detailed framework of diligence, analysis, discussions and negotiations with Tata Steel which will run over several months before potentially culminating in an agreed set of terms. Also, the company added that these terms will then require approval from the Netherlands Parliament as well as the Board of Tata Steel.
Additionally, Tata Steel also clarified UK media reports that claimed policy differences between the UK government and the opposition on its transformation plan.
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.
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