Tata executives met foreign and local institutional investors on Thursday in a bid to reassure its stakeholders.
Brokerage CLSA has accorded the "buy" rating for Tata Steel after it met with the company's management on Thursday, according to Cogencis.
The brokerage has set the target price at Rs 500. At 1400 hours, the shares of Tata Steel were trading at Rs 401, up Rs 3.90 or 0.98% higher from Thursday's close.
According to the agency, CLSA said that ex-Chairman Cyrus Mistry's ouster from Tata Sons is unlikely to have any impact on Tata Steel's strategic plans for its European business. This also includes the sale of its downstream assets and a joint venture with Germany's ThussenKrupp.
Under Mistry's rein, the Tata Group was in advanced talks to sell its European steel business after the company saw bountiful losses over the years as the European and world steel industry eroded. Talks of selling the UK business were later suspended. The now ex-Chairman, whose family owns nearly 18% in Tata Sons, had alleged that the company faced nearly $18 billion in write-downs, a claim that was later refuted by Tata Steel. On Friday, Tata Steel clarified to the BSE that it was still pursuing its European consolidation strategy and talks with ThyssenKrupp AG were still underway which lent support to the stock.
According to the brokerage, the stock is now more attractive after the correction seen this week. According to Cogencis, the stock was down 6.7% in the week, after all the Tata Group stocks took a hit on Mistry's exit.
On Friday, Tata Steel Minerals Canada signed agreements with the Quebec government which will lead to investments of nearly Rs 875 crore, to set up new mining operations in Quebec Newfoundland and Labrador peninsula in Canada. Tata Steel also clarified to the BSE on Friday that
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