Tinplate in the green

It looks like the child wants to now find its own feet and look for an identity beyond its illustrious parent. Tinplate, a subsidiary of Tata Steel, has stated that it wants to look at business opportunities on its own and wants to stop working as a  mere downstream processing unit for Tata Steel – the company converts HR coils into electrolytic tinplate for Tata Steel.

Tinplate now wants to source HR coils from Tata Steel as a vendor, to the tune of Rs.1800 crore per annum and look at options of further expansions. Clearly, the company now wants to spread its wings beyond Tata Steel and is now awaiting shareholder approval for the same.

This is a huge transition – almost like getting out from a secured working deal to trying to build space in the big bad world on its own. How it will manage this change, mainly on the financial aspect is what the fine print will be all about.

Tata Steel currently holds 75% stake in Tinplate and a couple of years ago, there was actually talk of it getting merged into Tata Steel.

From yesterday’s close of Rs.89.75, the stock price today rose to Rs.94 and remains firmly in the green