Usha Martin hits 52-week high as Tata Steel to acquire steel business

Shares of Usha Martin hit a 52-week high of Rs 36.40 per share, up 16% on the BSE in the opening deal after Tata Steel has executed a definitive agreement for the acquisition of the company’s steel business through a slump sale on a going concern basis.
“The company has executed definitive agreements for sale of its steel business to Tata Steel or its subsidiaries through a slump sale on going concern basis for consideration being in the rage of Rs 43 billion – Rs 47 billion,” Usha Martin said on Saturday in a press release.

The closing of the acquisition is subject to the fulfilment of various conditions under the agreements. The parties shall jointly work towards fulfilment of conditions precedent which are largely regulatory approvals required for the transfer of the business undertaking. All the employees pertaining to the steel business will transfer as part of the acquisition, Tata Steel said in a statement.

The steel business undertaking of Usha Martin inter-alia comprises of a specialized around 1.0 mtpa alloy based manufacturing capacity

Subscribe to Business Standard YouTube channel

Derivatives strategy on Tata Steel by HDFC Securities

.

Derivatives strategy on Tata Steel by Nandish Shah, Technical & Derivatives Analyst at HDFC Securities:

Buy Tata Steel September 620 CALL @ Rs 18.8
Stop loss of Rs 14
Target Rs 28
Rationale: We have seen Long positions being rolled over to the September series in Tata Steel with Open Interest rising by 5% with Price moving up by 2%.

We have seen healthy rollover of 94% as against last three series average rollover of 76%

The stock price is trading above its important short-term moving averages Indicating a bullish trend for the short term
Momentum Indicators and Oscillators like RSI and MACD are also Indicating strength in the stock for the short to medium term.

Today's picks: Tata Steel to YES Bank, hot stocks to watch on Wednesday

Nifty
Current: 11,738 (fut: 11,757) Target: NA
Stop-long positions at 11,675.
Stop-short positions at 11,825.
Big moves could go till 11,625, 11,900. A long 11700p (19), long 11,800c (17) work gain if the index moves outside 11,664, 11,836 by Thursday.

Bank Nifty
Current: 28,269 (futures: 28,313)
Target: NA
Stop-long positions at 28,175. Stop-short positions at 28,450. Big moves could go till 27,950, 28,725. Profit booking seems a little more likely than a continuing uptrend.
Tata Steel
Current price: Rs 590
Target price: Rs 598
Keep a stop at Rs 585 and go long. Add to the position between Rs 596 and Rs 597. Book profits at Rs 598.

YES Bank
Current price: Rs 370
Target price: Rs 364
Keep a stop at Rs 374 and go short. Add to the position between Rs 365 and Rs 366. Book profits at Rs 364. Target prices, projected movements in terms of next session, unless otherwise stated 

Today's picks: From Tata Steel to BPCL, hot stocks to watch on Thursday

Nifty
Current: 11,570 (fut: 11,587), Target: NA
Stop-long positions at 11,490. Stop-short positions at 11,655. Big moves could go till 11,450, 11,700. A long 11,700c (24), long 11,400p (24) will gain if there's a 2% move in either direction by settlement.

Bank Nifty
Current: 28,258 (fut: 28,289), Target: NA
Stop-long positions at 28,175. Stop-short positions at 28,400. Big moves could go till 27,950, 28,625. Up trend may be halted by profit-booking.

Tata Steel
Current price: Rs 582
Target price: Rs 572
Keep a stop at Rs 588 and go short. Add to the position between Rs 575 and Rs 577.
Book profits at Rs 572.

Tech Mahindra
Current price: Rs 709
Target price: Rs 720
Keep a stop at Rs 702 and go long. Add to the position between Rs 715 and Rs 718.
Book profits at Rs 720.

Tata Steel to get 45% stake in Thyssenkrupp joint venture: Sources

Stock Market - Thyssenkrupp AG and Tata Steel Ltd. are closing in on a European steel joint venture after a last-minute change to the deal terms that won approval from Thyssenkrupp’s union.

In the revised deal, Thyssenkrupp will own about 55 per cent of the equity in the new company and Tata will have 45 per cent, according to people familiar with the matter. The changes happened after Thyssenkrupp’s activist shareholders pressured management to squeeze better terms from the deal, which was originally a 50-50 split. The voting rights will be equally split.

The talks over the joint venture have dragged on for more than a year and faced opposition from labour representatives, as well as activist shareholders. Thyssenkrupp’s labour representatives said on Thursday they would vote in favour of the joint venture, paving the way for it to go through.

Check Live - TATA Steel Stock Price

Tata Steel, NMDC hit 52-week high; L&T, Hindalco touch record high

STOCK MARKET - Tata Steel, NMDC, Oil India, Jain Irrigation Systems, Jet Airways and Jindal Steel & Power (JSPL) are among 36 stocks from the S&P BSE 500 index that hit their respective 52-week highs on BSE.

Of these 36 stocks, around 21 recorded new highs in intra-day trade. These include Larsen & Toubro (L&T), Sun TV Network, Hindalco Industries, APL Apollo Tubes, Bajaj Electricals, Rain Industries and Sterlite Technologies

Besides NMDC and Oil India, NHPC, Steel Authority of India (SAIL) and SJVN from the public sector undertaking (PSU) hit 52-week highs on BSE.

Tata Steel, the largest gainer among the S&P BSE Sensex stocks, was up 3% to Rs 754, while APL Apollo Tubes too rallied 13% to Rs 2,373 on BSE.

Analysts at Emkay Global Financial Services expect steel prices to maintain the strength on the back of trade protection measures, consolidation in Chinese steel industries and expected improvement in industrial and infrastructure activities in India.

“Higher grade iron ore prices also are likely to maintain strength, as Chinese mills are now using better grade. Coking coal prices are too likely to remain firm. In case of non- ferrous metals, we expect mixed trend. For aluminium, better clarity should emerge post winter season; China’s expected new capacity will be crucial for the global demand supply dynamics. Higher supply is likely to weigh on Zinc prices. Mine ore and coal prices are expected to remain strong in 2018,” the brokerage firm said in metal & mining sector update.

L&T hit a new high of Rs 1,305, up 2%, extending its previous day’s 2% gain on BSE. In past three weeks, the stock outperformed the market by gaining 10% against 2% rise in the S&P BSE Sensex. In past one week, L&T has received orders worth of Rs 9,634 crore in various segments.

Steel stocks in focus as Tata Steel posted good sales, production in Q2FY18

Shares of frontline steel companies were up in the range of 2% to 7% after the Tata Steel reported a good sales and production in July – September quarter of the current fiscal (Q2FY18).

Tata Steel, Steel Authority of India (SAIL), Jindal Steel & Power (JSPL), JSW Steel, Jindal Saw and Jindal Stainless (Hisar) from the S&P BSE500 index were up between 2% and 4% on the BSE. Vardhman Special Steels, Prakash Industries, Maharashtra Seamless, Surya Roshni, Sarda Energy & Minerals and Mukand were up in the range of 3% to 9%.

Tata Steel rallied 5% to Rs 691 on BSE in intra-day deal, trading close to its 52-week high of Rs 697 touched on September 21, 2017.

The company’s sales volume increased 17% on a year-on-year (yoy) basis to 6.4 million tonne (MT) and production grew by 4.7% yoy to 6.22 MT in Q2FY18, according to the provisional production and sales performance figures released by the company on Wednesday after market hours.

Tata Steel said it blast furnaces and sinter plants at the Jamshedpur achieved the best-ever second quarter production of 2.8 MT and 2.9 MT, respectively. The previous best for both had been reported in Q2FY16.

Meanwhile, Tata Steel Europe deliveries were higher, reflecting stable market conditions and improved finishing processes, it added.

GET LIVE UPDATES ON MARKET

Tata Steel hits over 6-year high after UK regulator approves pension scheme

Tata Steel hit an over 6-year high of Rs 692, up 4.7% on BSE in early morning trade after Tata Steel UK said that the British Steel Pension Scheme (BSPS) has been separated from itself and a number of affiliated companies. The stock was trading at its highest level since January 2011.

“Tata Steel UK has received confirmation from The Pensions Regulator that it has approved a Regulated Apportionment Arrangement (RAA) in respect of the British Steel Pension Scheme (BSPS). The BSPS has now been separated from Tata Steel UK and a number of affiliated companies,” Tata Steel said in a news release.

According to Reuters report, Thyssenkrupp could reach an agreement in principle this month to merge its European steel business with that of Tata Steel, the group said on Monday, adding talks were constructive and had entered the final stretch.

“Tata Steel is now reaping benefits from increased domestic capacity and persistently strong profitability in both India and Europe. A potential JV with ThyssenKrupp in Europe should aid further deleveraging,” analysts at HDFC Securities said in Q1FY18 results review.

In past four months, the stock has outperformed the market by surging 57% as compared to 6% rise in the S&P BSE Sensex.

GET LIVE UPDATES ON MARKET

Option strategy on Tata Steel by Motilal Oswal Securities

STOCK MARKET - Option Strategy on Tata Steel by Chandan Taparia, Derivatives and Technical Analyst at MOSL:

TATA STEEL – BULL CALL SPREAD
BUY TATA STEEL 620 CALL @ 15.00
SELL TATA STEEL 630 CALL @ 11.20
BEP : 623.80
KEEP SL : 4000
KEEP TARGET : 8000

Rationale:
1. Positive sector outlook and a fresh breakout in the stock
2. Put writing at 620 and 600 strike is supporting it to move higher
3. Call unwinding at 600, 610 and 620 strikes could take it to higher levels.
4. However, maximum Call OI at 640, may restrict its upside
5. Thus low risk Bull Call Spread is recommended

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.

GET LIVE UPDATES ON MARKET

Tata Steel hits 6-year high post Q1 results

STOCK MARKET - Tata Steel hit an over six-year high of Rs 625, up 4% on BSE in otherwise weak market after the company reported a consolidated net profit of Rs 921 crore in the April-June quarter (Q1FY18). The stock is trading at its highest level since April 27, 2011.

The company had posted a huge loss of Rs 3,183 crore in the corresponding period last year.

The strong growth in net profit during the reporting quarter has come despite Rs 617 crore exceptional hit due to provisioning related to mining related operations by its South East Asian operations.

“Strong operating performance both in the Indian operations as well as European operations has resulted in the better than expected results. The management has re-iterated that increased capacity in Indian and ongoing restructuring in the European operations has lead to consolidated sales growth of 19.3% YoY to Rs 30,973 crore,” Angel Broking said in a client note.

GET LIVE UPDATES ON MARKET

Over 90% shareholders voted to oust Nusli Wadia at Tata Steel EGM

Nusli Wadia was removed as independent director of Tata Steel on Wednesday with more than 90 per cent of the shareholders voting in favour of his ouster.

According to the companies statement, 56.79 crore votes out of a total of 62.55 crore votes were voted in favour of the removal of Mr. Wadia. In other words, 90.80 per cent shareholders supported the resolution.  The balance 9.2 percent of the votes cast were in favour to retain him. 

Although this motion was an ordinary resolution which required a simple majority, it crossed the hurdle of 75 per cent vote share required for special resolution.

Nearly 82.5 percent of the institutional shareholders voted him out while 84.47 percent of the retail shareholders also supported the resolution. Overall 64.4 percent of shareholders voted (Read More).