The stock rose by 10% on Friday, hitting the upper trading limit for the day at ₹432.50, marking a nearly 59% increase over the past three days in response to the merger plan being scrapped.
The proposed amalgamation between TRF and Tata Steel, announced in 2022, was perceived as unfavorable for TRF shareholders. According to Amit Kumar Gupta, founder of Fintrekk Capital, the initially announced swap ratio was deemed unbeneficial for minority shareholders, leading to a correction in TRF shares. The recent decision to cancel the merger represents a reversal of this trend.
Following the merger announcement in 2022, TRF shares experienced a sharp decline, remaining locked in a 5% lower circuit for 16 consecutive trading sessions and witnessing a 56% decrease in value within a month.
The decision to call off the amalgamation was influenced by a turnaround in TRF's business operations, which have shown improvement over recent quarters, partly due to significant support from Tata Steel.
Trading data from the National Stock Exchange (NSE) indicates that TRF shares have experienced above-average trading volumes in the past four sessions, with a significant increase in shares for which delivery was taken.
According to Sudeep Shah, head of technical and derivatives research at SBICap Securities, the next price target for TRF shares could be around ₹600 over a period of 6-12 months. However, he anticipates some consolidation in the near term following the recent sharp increase in value.
Comments
No comment yet.