DERIVATIVES FUTURE: TATA STEEL

• August 5, 2021
• By BIPRO HALDAR
• 70 Views 245 comments

Tata Steel Limited is an Indian multinational steel-making company based in Jamshedpur, Jharkhand, and is headquartered in Mumbai, Maharashtra, India. It is a subsidiary of the Tata is a steelmaking company headquartered in London, United Kingdom, with its main operations in the United Kingdom and the Netherlands. Corus Group was formed through the merger of Koninklijke Hoogovens and British Steel plc in 1999 and was a constituent of the FTSE 100 Index. It was acquired by Tata of India in 2007, and renamed Tata Steel Europe in September 2010. At formation Corus operated steelmaking plants (blast furnaces) in Port Talbot, Wales; Scunthorpe and Teesside, England; and IJmuiden, the Netherlands, with additional steelmaking facilities in Rotherham, England (electric arc furnace), as well as downstream steel production of both long and flat steel. Profitability at the business was affected by the aftermath of the Financial crisis of 2007–08 (see Great Recession): the Teesside plant was mothballed and sold in 2009/2010; the long products division including the steelworks at Scunthorpe was sold for a nominal sum to Greybull Capital in April 2016.
In September 2017, Tata Steel Ltd reached an agreement to merge its European steel business with the German steel manufacturer ThyssenKrupp to form a joint venture headquartered in Amsterdam.^[1] The agreement subsequently failed.^[2] .On 20 October 2006, Corus announced that it had accepted at £4.3 billion ($8.1 billion) offer from Tata Steel; a valuation of £4.55 per share. The combination of Corus (18.18MT pa) and Tata (4.4MT pa) would create the fifth largest steelmaking company worldwide.^[12] Tata surprised the credit default swap segment of the derivative markets by deciding to raise $6.17 billion of debt for the deal through a new subsidiary of Corus called ‘Tata Steel UK’, rather than by raising the debt itself. Tata’s security credit rating was investment grade, whereas the new subsidiary may not be. The higher risk associated with raising debt through a subsidiary with a lower credit rating prompted Fitch Ratings to downgrade its rating of the credit swap risks in the takeover to ‘negative’. Fitch also stated that Corus’ responsibility for the debt may lead to Corus’ own unsecured debt rating being downgraded. This does not affect the rating of bonds issued by Corus which are secured debt.

Script Name –TATA STEEL

Buy Price –1402

Profit Target-1450/1480/1500

Stop Loss-1390

Call Duration-Delivery

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