Tata Steel Shares Rise On News UK May Give 500-Million Pound Grant
The agreement was reached during the Rishi Sunak-led Conservative government in UK, which the Labour Party pledged to maintain during election campaign.
Tata Steel Ltd. logged marginal gains during the wee hours of trading on Tuesday, as BBC reported the steel manufacturer may receive a 500 million pound grant from the UK government. British ministers are reportedly preparing to announce an agreement to provide the grant towards its 1.2-billion pound furnace for transitioning to green-steel making furnace.
The agreement is likely to have assurance over future investments, which includes investment in Port Talbot, BBC reported. The agreement was reached during the Rishi Sunak-led Conservative government in UK, which the incumbent Labour Party pledged to maintain during election campaign.
This move is expected as UK ministers are talking to committees and Tata Steel to keep the steel production running in South Wales.
The company has steel manufacturing, raw materials, and rolling mills operations at seven locations in the UK—Port Talbot, Corby, Llanwern, Trostre, Hartlepool, Shotton, and Shapfell. In July, the company shut down one of the two furnaces at Port Talbot.
Shares of Tata Steel rose as much as 0.99%, the highest level since Sept. 6, before erasing all gains to trade 0.31% lower at Rs 149 apiece, as of 10:12 a.m. This compares to a 0.15% decline in the NSE Nifty 50.
The stock has risen 13.98% in 12 months, and 6.9% year-to-date. Total traded volume so far in the day stood at 0.25 times its 30-day average on NSE. The relative strength index was at 37.13.
Out of 32 analysts tracking the company, 14 maintain a 'buy' rating, nine recommend a 'hold' and nine suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 11.7%.
