Tata Steel may bid for Salem. Is it a logical move? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  
  • Home
  • Outlook Arena
  • Mar 29, 2000 - Tata Steel may bid for Salem. Is it a logical move?

Tata Steel may bid for Salem. Is it a logical move?

Mar 29, 2000

According to newspaper reports, Tata Steel is in talks with Usinor of France to jointly bid for Steel Authority of India's Salem Steel Plant (SSP). Tisco (FY99 Net Sales Rs 62,746 m), a part of the Tata Group, is India's largest integrated private sector steel producer.

If Tata Steel were to bid for the company, it would be a logical move for several reasons. First, Tisco is operating close to its capacity levels. The only new project that is underway is the cold roll mill, which is expected to go on stream shortly. Therefore a move to acquire SSP would add to growth prospects in the future. Also, as SSP manufactures stainless steel (a value added product), Tisco's product profile would shift in favour of value added products.

Other advantages pertain to the fact that SSP (which manufactures stainless steel) could source its steel requirements from Tisco itself. The two companies would benefit from the synergies that exist between their operations.

There are several concerns that may override all these benefits. One is a large labour base, a problem that Tisco itself is grappling with. Then there is uncertainty regarding the degree of interference of the government in the running of the organisation post change of management.

Therefore although the move may seem logical, there are several key issues that may dramatically affect the viability of the proposal.

Market View:
Analysts have rate the stock as a ‘BUY’ on account of its attractive valuations and a pick up in demand for steel in line with the growth in the economy.

Equitymaster requests your view! Post a comment on "Tata Steel may bid for Salem. Is it a logical move?". Click here!


More Views on News

Do Metal Stocks Really Track Metal Prices? (Views On News)

Sep 11, 2021

A close look at the performance of base metals and key companies in that sector.

A Peek into Tata Steel's Stellar June Quarter Performance (Views On News)

Aug 13, 2021

Tata Steel's June quarter profits were higher than the full-year profits reported for fiscal 2021.

TATA STEEL 2020-21 Annual Report Analysis (Annual Result Update)

Jul 8, 2021 | Updated on Jul 8, 2021

Here's an analysis of the annual report of TATA STEEL for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of TATA STEEL. Also includes updates on the valuation of TATA STEEL.

Tata Metaliks Share Price Jumps 8% After Turning Profitable (Views On News)

Jul 14, 2021

A peek into Tata Metaliks' stellar June quarter performance.

Shyam Metalics IPO: Key Points to Consider (Views On News)

Jun 12, 2021

Shyam Metalics is commanding a strong grey market premium ahead of its IPO next week.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 3, 2021 (Close)


  • Track your investment in TATA STEEL with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks