Shares of Tata Consumer Products Ltd. and Tata Coffee Ltd. surged to life-high on Friday after it was announced that the scheme of arrangement for merger of the two entities will be effective from Jan. 1, 2024.
The scheme involves the demerger of Tata Coffee's plantation business into TCPL Beverages & Foods Ltd. and the merger of the remaining business with Tata Consumer Products.
Shares of Tata Consumer Products Ltd. rose as much as 3.65%, highest since its listing on BSE on Aug. 20, 1977, before paring gains to trade 2.97% higher at 10:10 a.m. This compares to a 0.38% decline in the NSE Nifty 50.
The stock has risen 39.51% year-to-date. Total traded volume so far in the day stood at 6.7 times its 30-day average. The relative strength index was at 87.95, implying that the stock is overbought.
Of the 25 analysts tracking the company, 21 maintain a 'buy' rating, three recommend a 'hold,' and one suggests a 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 7.3%.
Tata Coffee stock gained 4.26% intraday, the most since its listing on BSE on Feb. 24, 2000. It pared gains to trade 3.34% higher at 10:10 a.m., compared to a 0.38% decline in the Nifty.
The shares have risen 46% year-to-date. Total traded volume so far in the day stood at 11 times its 30-day average. The relative strength index was at 89.62, implying the stock is overbought.
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