TRF shares hit 5% upper circuit for 2nd day on investment by Tata Steel

Shares of Tata Group company TRF continued its gaining momentum on Friday, with stock price hitting 5% upper circuit for the second straight session after its parent firm, Tata Steel, invested ₹165 crore in the company for its working capital requirements. The stock opened 5% higher at ₹140.85 and got locked at upper circuit on the BSE, in an otherwise weak broader market. In contrast, the BSE Sensex was trading 643 points lower at 54,677 levels at the time of reporting.

Investors remained bullish on the stock as it continues to draw strength from the strong parentage of the Tata group and financial support from the parent company, Tata Steel. As per the latest shareholding pattern available on the BSE, Tata Steel owns a 34.11% equity stake in TRF, while it subscribed to 12.5% non-convertible redeemable preference shares of ₹250 crore in FY19. Besides, Tata Steel also provided operational support to TRF by awarding work orders of ₹155 crore in FY19, ₹254 crore in FY20 and ₹26 crore in FY21.

TRF in an exchange filing on Thursday said the company has allotted 16.5 crore preference shares worth ₹165 crore to Tata Steel on private placement basis. “The Committee of Directors, as authorised by the Board of Directors at its meeting held on March 14, 2022, has on June 8, 2022 approved the allotment of 16.5 crore, 12.17% (effective yield) non-cumulative, non-convertible, non-participating, redeemable preference shares of face value ₹10 each, at par, for consideration in the form of cash, aggregating to ₹165 crore, (‘NCRPS Series-1’) to Tata Steel Limited, on private placement basis, on terms and conditions as approved by the Board,” as per the filing.

The fund raise will help the material handling equipment manufacturer to meet its working additional needs, repay a part of the existing debts, and other general corporate purposes.

For January-March quarter of 2022, TRF reported consolidated net profit of ₹26.6 crore against net loss of ₹6.89 crore in the same period last year. However, revenue from operations dropped to ₹49.48 crore, from ₹60 crore in the corresponding period last year.

TRF is engaged in manufacturing material handling equipment and delivering processing systems required in the infrastructure sector. The company operates through two divisions, namely product division and project division. Product division is engaged in manufacturing of bulk material handling equipment with its manufacturing facility being located at Jamshedpur. Project division is involved in design, manufacture, supply, installation and commissioning of customised material handling system for infrastructure development industries such as power, steel, cement, ports, mining, etc.