Tata Steel Shares Surge as UK Considers £500M Grant

11 Sep, 2024

Tata Steel Shares Surge as UK Considers £500M Grant

Tata Steel Ltd. experienced a slight increase in shares during early trading on Tuesday, following reports from the BBC about a potential 500 million pound grant from the UK government. The grant is aimed at supporting Tata Steel’s 1.2-billion pound investment in a new green-steel furnace. This financial boost is expected to include assurances for future investments, particularly in Port Talbot, where the company is crucial to the local economy.

The agreement, reportedly reached under the Conservative government led by Rishi Sunak, is set to be maintained by the Labour Party, reflecting a cross-party commitment to sustaining the steel industry in South Wales. Tata Steel operates several facilities in the UK, including in Port Talbot, Corby, Llanwern, and others. The company recently shut down one of its two furnaces at Port Talbot.

Following the news, Tata Steel shares initially rose by 0.99% but later adjusted to a 0.31% decline at Rs 149 per share. The stock has seen a 13.98% increase over the past year and a 6.9% rise year-to-date. Trading volume for the day was 0.25 times the 30-day average, and the stock’s relative strength index stood at 37.13. Of 32 analysts covering Tata Steel, 14 have a 'buy' rating, nine suggest 'hold', and nine recommend 'sell', with a consensus price target suggesting an 11.7% upside.