Non-promoter shareholders of Tata Metaliks Ltd (TML) at its AGM here on Wednesday wanted the valuation of the company be revisited in connection with the merger proposal.
The proposal, in a filing to the stock exchanges made on April 11, had stated that the company’s board and the committee of directors of Tata Steel Ltd (TSL), TML’s parent, approved amalgamation of TML with TSL. Based on the valuation, the ratio was fixed at four shares (Rs 10 each) of TSL for 29 held shares in TML.
8 TSL for 29 TML
“With the company just starting to turn around, the ratio should be improved. We should at least get eight Tata Steel shares for every 29 shares of TML),” said industrialist Sanjay Bhuddia (MD of Patton International) at the AGM. He holds 2.63 per cent in TML.
“The company had commissioned the sinter plant in April, which will help to bring down the cost of production. So the management should wait for at least six more months before deciding on the merger. Shareholders should get a good value,” said another shareholder Kumar Gautam, who holds 2.5 lakh shares. The sinter plant processes low-cost fines and cut cost of production for the pig iron and ductile pipe maker.
TML reported net profit of Rs 77 lakh in April-Jun against a loss of Rs 40.27 crore in January-March quarter.
The Tata Metaliks Chairman Koushik Chatterjee assured the shareholders that the management would consider the subject and address the concerns of the minority shareholders.
“We have not taken a final decision yet. We are in the process of filing the merger proposal. We would take into account the interest of the minority shareholders,” he said.
“The merger proposal was considered taking into account the impact of raw material inflation. The input cost inflation was just too high for the kind of product Tata Metaliks was producing. The merger of the company will make this business more sustainable,” he said.
On Wednesday, the shares of Tata Metaliks closed 1.15 per cent higher at Rs 39.45, on the BSE.
jayanta.mallick@thehindu.co.in