Tata Steel Shareholders Approve Related Party Transactions for FY2026

May 16, 2025 – Mumbai, India

Tata Steel Limited (NSE:TISC), one of India’s leading steel manufacturers, announced on May 16, 2025, that its shareholders have approved a series of material related party transactions (RPTs) through a postal ballot and remote e-voting process concluded on May 15, 2025. The approval, detailed in a press release, encompasses 20 ordinary resolutions involving operational and financial dealings with Tata Group entities, including Tata Capital Limited, Neelachal Ispat Nigam Limited, and Tata Motors Limited (NSE:TAMO, NYSE:TTM). The transactions, conducted at arm’s length and in compliance with the Securities and Exchange Board of India (SEBI) regulations and the Companies Act, 2013, reflect Tata Steel’s ongoing business relationships within the conglomerate, supporting its operational efficiency and strategic growth.

Details of the Approval

The e-voting period, facilitated by the National Securities Depository Limited (NSDL), ran from April 16 to May 15, 2025, with shareholders registered as of April 4, 2025, eligible to vote based on their equity shareholding. The scrutinizer’s report, submitted on May 15, confirmed that the resolutions passed with the requisite majority, aligning with SEBI’s Listing Obligations and Disclosure Requirements (LODR). The transactions include:

• Factoring Services with Tata Capital: Tata Steel discounts sales receivables from goods sold on credit, with transactions estimated at ₹10,000 crore for FY2026, accounting for 55% of Tata Capital’s FY2023-24 consolidated turnover.
• Operational Transactions: Dealings with subsidiaries like Neelachal Ispat Nigam Limited for raw material security and centralized procurement.
• Financial Transactions: Leasing arrangements and one-time material transactions with entities like Tata Motors, enhancing supply chain integration.

The notice, sent electronically to promote green initiatives, was accessible on Tata Steel’s website and the NSDL e-voting platform, with shareholders urged to register email addresses with MUFG Intime India Private Limited for participation.

Context and Strategic Importance

The approval comes amid Tata Steel’s robust FY2025 performance, with India’s crude steel production rising 5% year-on-year to 21.8 million tons, driven by the commissioning of India’s largest blast furnace at Kalinganagar and higher output at Neelachal Ispat Nigam Limited. Domestic deliveries hit a record 19.7 million tons, up 4.4%, leveraging India’s steel demand growth. The RPTs are critical for streamlining operations, reducing logistics costs, and ensuring raw material security, as seen in recent mergers of subsidiaries like Tata Steel Long Products and The Tinplate Company of India, which boosted downstream consolidation.

Tata Capital’s factoring services, a key component, allow Tata Steel to manage receivables efficiently, supporting liquidity and operational scale. These transactions, deemed “ordinary course of business” by Tata Capital’s audit committee, have historically been approved with strong shareholder support, as evidenced by a March 2024 vote where 99.62% of non-public institutional voters favored similar deals. The current approval reinforces shareholder confidence in Tata Steel’s governance, especially under CEO T.V. Narendran, reappointed in 2023 with 99.47% approval.

Financial and Market Context

Tata Steel’s market capitalization stands at ₹196,553 crore as of May 12, 2025, with a share price of ₹157.30, down 5.15% over the past year. Despite a 9.34% sales growth over five years and a low return on equity of 5.97%, the company projects a share price range of ₹129.35–₹143.12 for 2025, driven by infrastructure demand and operational efficiency. The promoter holding of 33.19% and strong institutional investments signal stability, though analysts note risks from global steel demand fluctuations and regulatory changes.

The RPTs are part of Tata Steel’s broader strategy, including a $2.5 billion investment in T Steel Holdings Pte. Ltd. for debt repayment and restructuring, announced on May 12, 2025, retaining 100% ownership. This follows strategic moves like the UK’s Port Talbot Electric Arc Furnace project, backed by a £500 million government grant, aiming to cut emissions by 5 million tons annually.

Implications and Outlook

The shareholder approval, reported by Investing.com, underscores Tata Steel’s commitment to transparency and regulatory compliance, crucial as Tata Capital prepares for its September 2025 listing to meet Reserve Bank of India norms. While specific financial impacts of the RPTs were not disclosed, they are expected to enhance revenue generation and operational synergies, as seen in Tata Steel’s 60% revenue growth on its Aashiyana e-commerce platform.

Posts on X reflect positive sentiment, with @REDBOXINDIA highlighting the $2.5 billion investment, signaling confidence in Tata Steel’s financial strategy. However, the company faces challenges, including moderate share price volatility (52-week high: ₹184.60, low: ₹122.62) and global economic uncertainties. As Tata Steel targets a 30 million ton domestic steelmaking capacity by 2025, the approved RPTs will bolster its supply chain and financial framework, positioning it for growth in a competitive global market.

Sources: Investing.com, Tata Steel website, Business Standard, India.com, Moneycontrol.com, posts on X