Tata Metaliks stocks up nearly 20% in early trade

Stocks of Tata Metaliks surged nearly 20% in an early morning trade on Wednesday a day after its parent company Tata Steel call off merger plans.

The stock of Tata Metaliks rose up by 19.94% or Rs 168.40 in the morning trade on the Bombay Stock Exchange (BSE). 

Tata Steel on Tuesday said that it has dropped plans to merge group companies namely Tata Metaliks and Tata Metaliks DI Pipes with itself. 

"Committee of Directors approved the proposal of the company to file appropriate application before the Bombay High Court seeking recall of the order dated August 21, 2015, sanctioning the scheme of amalgamation between Tata Metaliks and Tata Metaliks DI Pipes with the company," Tata Steel said in a regulatory filing to the BSE on May 17. 

The scheme was earlier recommended by the committee of directors, which was constituted and duly authorised by the Board of Directors, in April 2013 and approved by the members of the company at the court convened meeting in May 2014, it added.

The scheme is currently not effective since the petition filed by Tata Metaliks with the Calcutta High Court for approval of the scheme is pending for disposal, Tata Steel said in a statement. 

"The decision is based on careful consideration of various factors including inordinate delay in obtaining requisite regulatory and statutory approvals," Tata Steel Group Executive Director-Finance and Corporate, Koushik Chatterjee said.

Tata Metaliks is one of the leading manufacturers of foundry grade pig iron in India. 

At 12:30 hours, the shares of Tata Metaliks were trading up 19.94% or Rs 28.00 at Rs 168.40 per scrip on the BSE.