Tata Metaliks yesterday breached the 20% UC at Rs.140.40, a new 52-week high. Today too, it breached the 20% UC and hit a new high at Rs.168.40.

The company announced yesterday that Tata Steel has dropped its merger plans with Tata Metaliks and Tata Metaliks DI Pipes Ltd with itself.  It will apply for a recall of the Bombay HC order of 21st Aug’15 which allowed this merger but the delay was on account of Calcutta HC, which has not yet given its nod, forcing the company to withdraw now and reapply.

The market in thrilled because it expects a change in the swap ratio under this reapplication. The scheme approved in May’14 meant that for every 29 shares held in Tata Metaliks, shareholders will get 4 shares of Tata Steel. With the dynamics in Tata Steel undergoing a change, a much better swap ratio, with  more shares per Tata Metaliks share is expected.

For now, Tata Steel will continue to support Tata Metaliks and the latter will continue to operate as a subsidiary of Tata Steel.