Tata Group's Steelmaker Arm Raises Stake in IFQM to 16.66 Per Cent with Rs 12.49 Crore Investment
With a PE ratio of 81, the company trades at a discount compared to the industry PE of 17.4. The company has ROCE of 7.02 per cent and ROE of 17.4 per cent.
Tata Steel Limited has announced the acquisition of 1,24,90,000 equity shares in the Indian Foundation for Quality Management (IFQM), increasing its stake from 9.09 per cent to 16.66 per cent. This acquisition, completed on April 1, 2025, is a related party transaction, as Mr. Natarajan Chandrasekaran, Chairman of Tata Steel, is a member of the IFQM Board of Directors. The transaction, valued at Rs 12.49 crore, was conducted at arm's length and aligns with Tata Steel's strategic objectives to support IFQM's mission of integrating quality values across Indian industries. IFQM, a not-for-profit entity incorporated in September 2023, aims to drive positive change in the Indian industry, although it has not yet commenced operations or generated revenue. The acquisition reflects Tata Steel's commitment to enhancing its strategic portfolio and supporting quality management initiatives in diverse sectors.
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Tata Steel Ltd, established in 1907, is Asia's first integrated private steel company, with operations spanning the entire steel manufacturing value chain. The company aims to increase its domestic steelmaking capacity to 30 million tonnes per annum (MnTPA) by 2025. Tata Steel's diverse product portfolio includes flat products like hot rolled coils and long products such as wire rods and rebar, catering to sectors like automotive, construction, and energy.
The company has a significant market share in the alloy wire rod and automotive segments, with a strong distribution network of over 250 distributors and 20,400 dealers. Tata Steel's manufacturing capabilities include a steel plant in Jamshedpur and a sponge iron plant in Keonjhar, with vertically integrated operations. Recent strategic initiatives include a joint venture with the UK government to invest in electric arc furnace steelmaking and ongoing expansion projects in Kalinganagar and Punjab. The company has also undertaken significant amalgamations and capital expenditures to enhance its operational efficiency and market presence.
The company's current market capitalisation stands at Rs 1,93,681.94 crore, with a current price of Rs 155.15. The company has a 1-year return of -6.13 per cent and a 3-year return of 16.32 per cent..
In the Quarterly Results of December 2024, the company reported a revenue of Rs 53,648.30 crore, reflecting a YoY decline of 3.01 per cent compared to Rs 55,311.88 crore in December 2023. The operating profit stood at Rs 5,903.49 crore, marking a 5.75 per cent decline from Rs 6,263.57 crore in the same quarter last year. The profit after tax (PAT) declined by 36.37 per cent to Rs 326.64 crore from Rs 513.37 crore in December 2023.
In FY24, the company posted a revenue of Rs 2,29,170.78 crore, registering a 5.83 per cent decline compared to Rs 2,43,352.69 crore in FY23. The net profit for the year stood at a loss of Rs 4,437.44 crore, compared to a profit of Rs 8,760.40 crore in the previous financial year, marking a decline of 150.65 per cent.
With a PE ratio of 81, the company trades at a discount compared to the industry PE of 17.4. The company has ROCE of 7.02 per cent and ROE of 6.55 per cent.
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Disclaimer: The article is for informational purposes only and not investment advice.