Last week, the share price of Tata Steel went up by about 8 per cent on news reports stating that the company may announce the restructuring of its domestic business to unlock value.
Plans to reorganise Tata Steel’s business were initially discussed in the company’s Q1 FY20 analyst call. According to the management, restructuring of the India business includes: merger of Tata Steel BSL (erstwhile Bhushan Steel) with the group; and reducing or consolidating about 100 of its subsidiaries into four verticals — long products, downstream products, mining and infrastructure. The restructuring is expected to drive scale, synergy and simplification.
The management was hopeful that the process will be at an advanced stage by this year-end, but was also wary about the legal and regulatory processes. The recent buzz around the restructuring of the domestic business has re-kindled investor interest in the stock.